10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                           to   

Commission File Number: 001-32240

NEENAH PAPER, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-1308307
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3460 Preston Ridge Road Alpharetta, Georgia	30005
(Address of principal executive offices)	(Zip Code)

(678) 566-6500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 2, 2017, there were approximately 16,818,390 shares of the Company’s common stock outstanding.

TABLE OF CONTENTS

Part I — Financial Information
Item 1. Financial Statements	F-1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	F-15
Item 3. Quantitative and Qualitative Disclosure About Market Risk	F-24
Item 4. Controls and Procedures	F-24
Part II — Other Information
Item 1. Legal Proceedings	F-24
Item 1A. Risk Factors	F-24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	F-25
Item 6. Exhibits	F-26

Part I—FINANCIAL INFORMATION

Item 1.  Financial Statements

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
'[	2017			2016		2017			2016
Net sales	$	245.1		$	232.9	$	735.9		$	721.0
Cost of products sold	197.1			183.7		582.3			553.0
Gross profit	48.0			49.2		153.6			168.0
Selling, general and administrative expenses	21.4			21.0		70.9			71.8
Acquisition/integration/restructuring costs	0.9			1.2		0.9			3.7
Insurance settlement	(3.2		)	—		(3.2		)	—
Other (income) expense - net	(0.1		)	0.1		(0.2		)	0.3
Operating income	29.0			26.9		85.2			92.2
Interest expense - net	3.2			2.7		9.4			8.3
Income from continuing operations before income taxes	25.8			24.2		75.8			83.9
Provision for income taxes	7.0			7.8		14.4			26.9
Income from continuing operations	18.8			16.4		61.4			57.0
Loss from discontinued operations, net of income taxes	—			—		—			(0.4		)
Net income	$	18.8		$	16.4	$	61.4		$	56.6
Earnings Per Common Share
Basic
Continuing operations	$	1.11		$	0.97	$	3.63		$	3.36
Discontinued operations	—			—		—			(0.02		)
Basic	$	1.11		$	0.97	$	3.63		$	3.34
Diluted
Continuing operations	$	1.10		$	0.95	3.58			3.30
Discontinued operations	—			—		—			(0.02		)
Diluted	$	1.10		$	0.95	3.58			3.28
Weighted Average Common Shares Outstanding (in thousands)
Basic	16,811			16,771		16,794			16,774
Diluted	16,974			17,088		17,034			17,068
Cash Dividends Declared Per Share of Common Stock	$	0.37		$	0.33	$	1.11		$	0.99

See Notes to Condensed Consolidated Financial Statements

F-1

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017			2016
Net income	$	18.8	$	16.4	$	61.4		$	56.6
Unrealized foreign currency translation gain	5.0		0.7		16.1			0.9
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5)	1.4		1.9		4.6			5.5
Net gain (loss) from pension and other postretirement benefit plans (Note 3)	0.2		—		(1.0		)	—
Unrealized gain on “available-for-sale” securities	—		—		0.1			0.1
Income from other comprehensive income items	6.6		2.6		19.8			6.5
Provision for income taxes	0.5		0.7		1.4			2.1
Other comprehensive income	6.1		1.9		18.4			4.4
Comprehensive income	$	24.9	$	18.3	$	79.8		$	61.0

See Notes to Condensed Consolidated Financial Statements

F-2

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

	September 30, 2017		December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents	$	24.2	$	3.1
Accounts receivable (less allowances of $1.7 million and $1.5 million)	122.7		96.5
Inventories	124.3		116.3
Prepaid and other current assets	17.4		20.4
Total Current Assets	288.6		236.3
Property, Plant and Equipment
Property, Plant and Equipment, at cost	800.1		755.6
Less accumulated depreciation	418.7		391.0
Property, plant and equipment—net	381.4		364.6
Deferred Income Taxes	10.1		6.1
Goodwill	74.3		70.4
Intangible Assets—net	73.5		74.0
Other Noncurrent Assets	18.9		14.2
TOTAL ASSETS	$	846.8	$	765.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Debt payable within one year	$	1.3	$	1.2
Accounts payable	60.9		55.6
Accrued expenses	52.2		51.2
Total Current Liabilities	114.4		108.0
Long-term Debt	221.6		219.7
Deferred Income Taxes	20.8		10.1
Noncurrent Employee Benefits	86.3		86.7
Other Noncurrent Obligations	6.8		2.8
TOTAL LIABILITIES	449.9		427.3
Contingencies and Legal Matters (Note 8)	—		—
TOTAL STOCKHOLDERS’ EQUITY	396.9		338.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	846.8	$	765.6

See Notes to Condensed Consolidated Financial Statements

F-3

NEENAH PAPER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Nine Months Ended September 30,
	2017			2016
OPERATING ACTIVITIES
Net income	$	61.4		$	56.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	24.3			24.0
Stock-based compensation	4.3			4.4
Deferred income tax provision	4.4			10.4
Non-cash effects of changes in liabilities for uncertain income tax positions	0.2			—
Loss on asset dispositions	0.2			0.1
(Increase) decrease in working capital	(12.2		)	4.7
Pension and other postretirement benefits	(1.1		)	(2.3		)
Other	0.1			(0.2		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	81.6			97.7
INVESTING ACTIVITIES
Capital expenditures	(27.2		)	(49.4		)
Asset acquisition	(8.0		)	—
Purchase of marketable securities	—			(0.1		)
Other	(0.3		)	—
NET CASH USED IN INVESTING ACTIVITIES	(35.5		)	(49.5		)
FINANCING ACTIVITIES
Long-term borrowings (Note 4)	212.3			185.9
Repayments of long-term debt (Note 4)	(212.1		)	(206.3		)
Cash dividends paid	(18.9		)	(16.8		)
Shares purchased (Note 7)	(7.0		)	(8.0		)
Proceeds from exercise of stock options	0.4			0.3
NET CASH USED IN FINANCING ACTIVITIES	(25.3		)	(44.9		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	0.3			(0.2		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	21.1			3.1
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	3.1			4.2
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	24.2		$	7.3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest expense capitalized	$	6.1		$	5.2
Cash paid during period for income taxes	$	6.4		$	14.1
Non-cash investing activities:
Liability for equipment acquired	$	3.0		$	10.0

See Notes to Condensed Consolidated Financial Statements

F-4

NEENAH PAPER, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except as noted)

Note 1.  Background and Basis of Presentation

Background

Neenah Paper, Inc. (“Neenah” or the “Company”), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. See Note 9, “Business Segment Information.”

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings Per Basic Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Continuing operations	$	1.11		$	0.97		$	3.63		$	3.36
Discontinued operations	—			—			—			(0.02		)
Basic earnings per share	$	1.11		$	0.97		$	3.63		$	3.34

F-5

Earnings Per Diluted Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Add: Assumed incremental shares under stock compensation plans (a)	163			317			240			294
Weighted-average diluted shares	16,974			17,088			17,034			17,068
Continuing operations	$	1.10		$	0.95		$	3.58		$	3.30
Discontinued operations	—			—			—			(0.02		)
Diluted earnings per share	$	1.10		$	0.95		$	3.58		$	3.28

(a) For the three months ended September 30, 2017, there were 144,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. For the three months ended September 30, 2016, there were no antidilutive options. For the nine months ended September 30, 2017 and 2016, there were 72,000 and 47,000 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock.

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The following table presents the carrying value and the fair value of the Company’s debt. 

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value (a)(b)		Carrying Value		Fair Value (a)(b)
2021 Senior Notes (5.25% fixed rate)	$	175.0	$	171.0	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	43.9		43.9		42.9		42.9
German loan agreement (2.45% fixed rate)	7.0		7.0		6.8		6.8
Total debt	$	225.9	$	221.9	$	224.7	$	219.2

(a) The fair value for all debt instruments was estimated from Level 2 measurements.

(b) The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities.

As of September 30, 2017, the Company had $3.6 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of September 30, 2017, Neenah Germany had investments of $1.7 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6

F-6

million and $1.1 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet.

Income Taxes

Prior to June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them. As a result, the Company is no longer providing deferred income taxes on the 2017 unremitted earnings of our German operations and such taxes provided in the first quarter of 2017 of $2.3 million were reversed in the second quarter of 2017. In addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated in the second quarter of 2017.

Note 2.  Accounting Standard Changes

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. The new standards also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. The Company plans to implement ASU 2016-09 as of January 1, 2019. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be implemented by the Company as of January 1, 2018. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendments in this ASU provide guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for the Company as of January 1, 2018, on a prospective basis. The Company early adopted ASU 2017-01 in the third quarter of 2017. There was no material impact on the consolidated financial statements as a result of the adoption.

As of September 30, 2017, no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows. 

F-7

Note 3.  Supplemental Balance Sheet Data

The following table presents inventories by major class:

	September 30, 2017			December 31, 2016
Raw materials	$	32.5		$	31.6
Work in progress	36.7			26.8
Finished goods	61.6			63.0
Supplies and other	3.6			3.1
	134.4			124.5
Adjust FIFO inventories to LIFO cost	(10.1		)	(8.2		)
Total	$	124.3		$	116.3

The FIFO values of inventories valued on the LIFO method were $117.9 million and $106.8 million as of September 30, 2017 and December 31, 2016, respectively. For the three and nine months ended September 30, 2017, income from continuing operations before income taxes was increased by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the nine months ended September 30, 2017:

	Net unrealized foreign currency translation gain (loss)			Net gain (loss) from pension and other postretirement liabilities (a)			Unrealized gain (loss) on “available-for-sale” securities			Accumulated other comprehensive income (loss)
AOCI — December 31, 2016	$	(27.4	)	$	(64.5	)	$	(0.1	)	$	(92.0	)
Other comprehensive income (loss) before reclassifications	16.1			(1.0		)	0.1			15.2
Amounts reclassified from AOCI	—			4.6			—			4.6
Income from other comprehensive income items	16.1			3.6			0.1			19.8
Provision for income taxes	0.1			1.3			—			1.4
Other comprehensive income	16.0			2.3			0.1			18.4
AOCI — September 30, 2017	$	(11.4	)	$	(62.2	)	$	—		$	(73.6	)

(a) For the nine months ended September 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans. The Company also recorded a $0.2 million settlement loss in SERP for the three months ended September 30, 2017.

For the nine months ended September 30, 2017 and 2016, the Company reclassified $4.6 million and $5.5 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the condensed consolidated statements of operations. For the nine months ended September 30, 2017 and 2016, the Company recognized an income tax benefit of $1.7 million and $2.1 million, related to such reclassifications classified as "Provision for income taxes" on the condensed consolidated statements of operations.

F-8

Note 4.  Debt

Long-term debt consisted of the following:

	September 30, 2017			December 31, 2016
2021 Senior Notes (5.25% fixed rate) due May 2021	$	175.0		$	175.0
Global Revolving Credit Facilities (variable rates) due December 2019	43.9			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	7.0			6.8
Deferred financing costs	(3.0		)	(3.8		)
Total debt	222.9			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	221.6		$	219.7

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the “2021 Senior Notes”) at a face amount of $175 million. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of September 30, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes.

Amended and Restated Secured Revolving Credit Facility

In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). 

The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of September 30, 2017, the Company was in compliance with all terms of the Third Amended Credit Agreement.

On August 30, 2017, the Company amended the Third Amended Credit Agreement, among other things, to make certain definitional and administrative changes to address definition of EBITDA, Inter-Company Loans and Permitted Offshore Acquisitions, as further defined in the Third Amended Credit Agreement, in order to enable the Company to more efficiently operate and grow in international markets.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of September 30, 2017, the Company had $43.9 million of borrowings and $0.9 million in letters of credit outstanding under the Global Revolving Credit Facilities and $125.9 million of available credit (based on exchange rates at September 30, 2017). As of September 30, 2017, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 3.2 percent per annum. As of December 31, 2016, the weighted-average interest rate under the Global Revolving Credit Facilities was 2.8 percent per annum.

Under the terms of the 2021 Senior Notes and the Third Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Third Amended Credit Agreement and leverage levels under the Senior Notes. As of September 30, 2017, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

For additional information about our debt agreements, see Note 7 of the Notes to Consolidated Financial Statements in our 2016 Form 10-K.

F-9

Borrowings and Repayments of Long-Term Debt

The condensed consolidated statements of cash flows present borrowings and repayments under the Global Revolving Credit Facilities using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the nine months ended September 30, 2017, the Company made scheduled debt repayments of $0.6 million, $8.0 million of borrowings for an asset acquisition, and the remaining amounts of borrowings and repayments related to daily cash management activities. For the nine months ended September 30, 2016, the Company made scheduled debt repayments of $0.9 million and net long-term debt repayments of $19.5 million related to daily cash management activities.

Note 5.  Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans for substantially all its employees in Germany and the United Kingdom. In addition, the Company maintains a SERP which is a non-qualified defined benefit plan and a supplemental retirement contribution plan (the “SRCP”) which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SERP and SRCP to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified and non-qualified retirement benefit plans.

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended September 30,
	2017			2016			2017		2016
Service cost	$	1.3		$	1.2		$	0.3	$	0.3
Interest cost	3.6			4.0			0.3		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.4			1.6			—		0.1
Amortization of prior service benefit	0.1			0.1			—		(0.1		)
Net periodic benefit cost	$	1.4		$	2.2		$	0.6	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Nine Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	4.0		$	3.6		$	0.9		$	0.9
Interest cost	11.0			12.0			1.1			1.2
Expected return on plan assets (a)	(14.8		)	(14.2		)	—			—
Recognized net actuarial loss	4.5			4.9			0.1			0.2
Amortization of prior service benefit	0.2			0.2			(0.1		)	(0.2		)
Net periodic benefit cost	$	4.9		$	6.5		$	2.0		$	2.1

(a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return.

The Company expects to make aggregate contributions to qualified and nonqualified defined benefit pension trusts and to pay pension benefits for unfunded pension and other postretirement benefit plans of approximately $16 million in calendar 2017.  For the nine months ended September 30, 2017, the Company made $9.0 million of such payments. The Company made similar payments of $5.6 million and $18.4 million for the nine months ended September 30, 2016 and for the year ended December 31, 2016, respectively.

F-10

Note 6.  Stock Compensation Plan

Stock Options and Stock Appreciation Rights (“Options”)

The following table presents information regarding Options awarded during the nine months ended September 30, 2017:

Options granted	144,089
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54

The weighted-average grant date fair value for Options granted during the nine months ended September 30, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions:

Expected term in years	5.8
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

The following table presents information regarding Options that vested during the nine months ended September 30, 2017:

Options vested	113,581
Aggregate grant date fair value of Options vested (in millions)	$	1.6

The following table presents information regarding outstanding Options:

	September 30, 2017		December 31, 2016
Options outstanding	502,595		530,462
Aggregate intrinsic value (in millions)	$	15.7	$	25.0
Per share weighted average exercise price	$	54.36	$	38.35
Exercisable Options	279,581		336,336
Aggregate intrinsic value (in millions)	$	12.6	$	19.3
Unvested Options	223,014		194,126
Per share weighted average grant date fair value	$	14.65	$	15.15

Performance Share Units (“PSUs”) and Restricted Share Units (“RSUs”)

For the nine months ended September 30, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for certain items as further described in the Performance Share Award Agreement. The market price on the date of grant for the PSUs was $82.12 per share.

For the nine months ended September 30, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $75.85 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights and are forfeited in the event the holder is no longer a member of the Board of Directors on the vesting date. 

F-11

Note 7.  Stockholders’ Equity

Common Stock

As of September 30, 2017 and December 31, 2016, the Company had 16,818,005 shares and 16,771,000 shares of Common Stock outstanding, respectively.

In May 2017, the Company’s Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the “2017 Stock Purchase Plan”). The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2017 (the “2016 Stock Purchase Plan”) and May 2016 (the “2015 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans:

	Nine Months Ended September 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		33,800	2.6
2015 Stock Purchase Plan	—	—		93,600	5.2

Note 8.  Contingencies and Legal Matters

Litigation

The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company.

Income Taxes

The Company periodically undergoes examination by the Internal Revenue Service (the “IRS”) as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority.

F-12

Employees and Labor Relations

The Company’s U.S. union employees are represented by the United Steelworkers Union (the “USW”).  Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the “IG BCE”). As of September 30, 2017, the Company had approximately 653 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months. The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	199
June 2018	Neenah, WI (b)	USW	251
July 2018	Munising, MI (b)	USW	203
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	96
August 2021	Brattleboro, VT	USW	90
November 2021	Lowville, NY	USW	111

(a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union (“UNITE”) on an individual basis, but not under a collective bargaining agreement. 

Note 9.  Business Segment Information

The Company’s reportable operating segments consist of Technical Products, Fine Paper and Packaging and Other.

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

• The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers, primarily in North America.

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

F-13

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	125.9	$	114.1	$	375.1	$	362.1
Fine Paper and Packaging	113.3		112.9		343.3		340.4
Other	5.9		5.9		17.5		18.5
Consolidated	$	245.1	$	232.9	$	735.9	$	721.0

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	15.6		$	14.1		$	44.1		$	53.4
Fine Paper and Packaging	17.8			17.3			55.6			53.2
Other	0.2			0.1			0.1			0.1
Unallocated corporate costs	(4.6		)	(4.6		)	(14.6		)	(14.5		)
Consolidated	$	29.0		$	26.9		$	85.2		$	92.2

Note 10.  Subsequent Event

On November 1, 2017, the Company purchased all of the outstanding equity of W.A. Sanders Coldenhove Holding B.V. ("Coldenhove") for approximately $45 million. The payment was funded with $14 million of cash on hand and borrowings of $31 million from the Global Revolving Credit Facilities. Coldenhove is a specialty materials manufacturer based in the Netherlands, with a leading position in digital transfer media and other technical products. The Company assumed all rights, obligations and liabilities of Coldenhove, subject to certain representations, warranties, terms, conditions and indemnities typical in this type of transaction. The Company will account for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. The Company has not included the unaudited pro forma information in this filing, as the Company has not yet finalized the acquisition accounting.

F-14

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents the factors that had a material effect on our financial position as of September 30, 2017 and our results of operations for the three and nine months ended September 30, 2017 and 2016. You should read this discussion in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in our most recent Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Executive Summary

For the three months ended September 30, 2017, consolidated net sales of $245.1 million increased $12.2 million from the prior year period, as a result of growth in Technical Products due to higher volumes and favorable currency effects, and modest growth in Fine Paper and Packaging due mostly to higher priced mix.

Consolidated operating income of $29.0 million for the three months ended September 30, 2017 increased $2.1 million from the prior year period. The increase was primarily due to volume growth and improved operational efficiencies in Technical Products, as well as proceeds from an insurance settlement and benefits from currency effects. These favorable variances were partially offset by expected start-up losses in the US filtration business and higher input and transportation costs.

Cash provided by operating activities of $81.6 million for the nine months ended September 30, 2017 was $16.1 million lower than cash generated of $97.7 million in the prior year period, primarily due to an increased investment in working capital, largely in accounts receivable.

Results of Operations and Related Information

In this section, we discuss and analyze our net sales, earnings before interest and taxes (which we refer to as “operating income”) and other information relevant to an understanding of our results of operations for the three and nine months ended September 30, 2017 and 2016.

Analysis of Net Sales — three and nine months endedSeptember 30, 2017 and 2016

The following table presents net sales by segment, expressed as a percentage of total net sales:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017				2016				2017				2016
Net sales
Technical Products	$	125.9	52	%	$	114.1	49	%	$	375.1	51	%	$	362.1	50	%
Fine Paper and Packaging	113.3		46	%	112.9		48	%	343.3		47	%	340.4		47	%
Other	5.9		2	%	5.9		3	%	17.5		2	%	18.5		3	%
Consolidated	$	245.1	100	%	$	232.9	100	%	$	735.9	100	%	$	721.0	100	%

F-15

Commentary:

The following table presents our net sales by segment for the three months ended September 30, 2017 and 2016:

	Three Months Ended September 30,				Change in Net Sales Compared to Prior Period
							Change Due To
	2017		2016		Total Change		Volume			Net Price (a)		Currency
Technical Products	$	125.9	$	114.1	$	11.8	$	8.3		$	0.7	$	2.8
Fine Paper and Packaging	113.3		112.9		$	0.4	(1.8		)	2.2		—
Other	5.9		5.9		$	—	—			—		—
Consolidated	$	245.1	$	232.9	$	12.2	$	6.5		$	2.9	$	2.8

(a)Includes changes in selling price and product mix.

Consolidated net sales of $245.1 million for the three months ended September 30, 2017 increased $12.2 million from the prior year period, as a result of growth in Technical Products due to higher volumes and favorable currency effects, and modest growth in Fine Paper and Packaging due mostly to higher priced mix.

• Net sales in our technical products business increased $11.8 million from the prior period due to increased volumes for backings, label and filtration, as well as higher average selling prices and favorable currency exchange effects.

• Net sales in our fine paper and packaging business increased $0.4 million from the prior year period due to higher average selling prices, which offset lower shipping volumes. Volumes declined primarily for lower-priced, non-branded grades, which also contributed to a higher priced sales mix.

The following table presents our net sales by segment for the nine months ended September 30, 2017 and 2016:

	Nine Months Ended September 30,				Change in Net Sales Compared to Prior Period
								Change Due To
	2017		2016		Total Change			Volume			Net Price (a)			Currency
Technical Products	$	375.1	$	362.1	$	13.0		$	8.3		$	6.2		$	(1.5	)
Fine Paper and Packaging	343.3		340.4		$	2.9		8.5			(5.6		)	—
Other	17.5		18.5		$	(1.0	)	(1.0		)	—			—
Consolidated	$	735.9	$	721.0	$	14.9		$	15.8		$	0.6		$	(1.5	)

(a)Includes changes in selling price and product mix.

Consolidated net sales of $735.9 million for the nine months ended September 30, 2017 increased $14.9 million from the prior year period, as growth in both Fine Paper and Packaging and Technical Products was only partially offset by lower price mix in Fine Paper and Packaging, unfavorable currency effects, and a decline in sales of Other products, primarily related to datebooks, diaries and yearbooks.

• Net sales in our technical products business increased $13.0 million from the prior period due to higher volumes in backings, label and filtration, as well as higher priced mix. These items were partly offset by unfavorable currency effects.

• Net sales in our fine paper and packaging business increased $2.9 million from the prior year period due to higher volumes mostly offset by lower priced mix. Increased volumes reflected more direct sales of non-branded products as well as double digit growth in premium packaging.

F-16

Analysis of Operating Income — Three and nine months endedSeptember 30, 2017 and 2016

The following table sets forth line items from our condensed consolidated statements of operations as a percentage of net sales for the periods indicated and is intended to provide a perspective of trends in our historical results:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of products sold	80.4		78.9		79.1		76.7
Gross profit	19.6		21.1		20.9		23.3
Selling, general and administrative expenses	8.7		9.0		9.6		10.0
Acquisition/integration/restructuring costs	0.4		0.5		0.1		0.5
Insurance settlement	(1.3	)	—		(0.4	)	—
Other (income) expense - net	—		—		—		—
Operating income	11.8		11.6		11.6		12.8
Interest expense - net	1.3		1.2		1.3		1.2
Income from continuing operations before income taxes	10.5		10.4		10.3		11.6
Provision for income taxes	2.8		3.4		2.0		3.7
Income from continuing operations	7.7	%	7.0	%	8.3	%	7.9	%

Commentary:

The following table presents our operating income by segment for the three months ended September 30, 2017 and 2016:

							Change in Operating Income Compared to Prior Period
	Three Months Ended September 30,								Change Due To
							Total					Net		Input
	2017			2016			Change		Volume			Price (a)		Costs (b)			Currency		Other (c)
Technical Products	$	15.6		$	14.1		$	1.5	$	2.3		$	0.5	$	(1.0	)	$	0.4	$	(0.7	)
Fine Paper and Packaging	17.8			17.3			0.5		(0.1		)	0.1		(1.1		)	—		1.6
Other	0.2			0.1			0.1		—			—		—			—		0.1
Unallocated corporate costs	(4.6		)	(4.6		)	—		—			—		—			—		—
Consolidated	$	29.0		$	26.9		$	2.1	$	2.2		$	0.6	$	(2.1	)	$	0.4	$	1.0

(a)Includes changes in selling price and product mix.

(b)Includes price changes for raw materials and energy.

(c)Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses, start-up and other costs for the U.S. filtration business, insurance settlement, and acquisition/integration/restructuring costs.

Consolidated operating income of $29.0 million for the three months ended September 30, 2017 increased $2.1 million from the prior year period. The increase was primarily due to volume growth and improved operational efficiencies in Technical Products, as well as proceeds from an insurance settlement and benefits from currency effects. These favorable variances were partially offset by expected start-up losses in the US filtration business and higher input and transportation costs. Excluding an insurance settlement of $3.2 million for 2017 and acquisition, integration, and restructuring costs of $0.9 million and $1.2 million for 2017 and 2016, respectively, operating income decreased $1.4 million.

• Operating income for our technical products business increased $1.5 million from the prior year period primarily due to higher sales volumes, improved operational efficiencies, higher average selling prices and favorable currency effects. In addition, costs were lower due to the annual filtration maintenance down in Germany being deferred to the fourth quarter. These items more than offset costs during the U.S. filtration start-up phase and rising input prices. Excluding integration and restructuring costs of $0.1 million for 2016, operating income increased $1.4 million from the prior year.

F-17

• Operating income for our fine paper and packaging business increased $0.5 million from the prior year period. Operating income in 2017 included benefits from an insurance settlement of $2.9 million that was largely offset by increased transportation and input costs, and lower operating efficiencies. Excluding the insurance settlement of $2.9 million for 2017 and integration and restructuring costs of $0.3 million for 2016, operating income decreased $2.7 million.

• Unallocated corporate expenses for the three months ended September 30, 2017 of $4.6 million were consistent with the prior year period. Excluding acquisition and integration costs of $0.9 million and $0.8 million for 2017 and 2016, respectively, operating income increased $0.1 million.

 The following table presents our operating income by segment for the nine months ended September 30, 2017 and 2016:

							Change in Operating Income Compared to Prior Period
	Nine Months Ended September 30,									Change Due To
							Total						Net			Input
	2017			2016			Change			Volume			Price (a)			Costs (b)			Currency			Other (c)
Technical Products	$	44.1		$	53.4		$	(9.3	)	$	2.8		$	0.8		$	(4.9	)	$	(0.3	)	$	(7.7	)
Fine Paper and Packaging	55.6			53.2			2.4			2.9			(3.2		)	(1.2		)	—			3.9
Other	0.1			0.1			—			(1.0		)	—			—			—			1.0
Unallocated corporate costs	(14.6		)	(14.5		)	(0.1		)	—			—			—			—			(0.1		)
Consolidated	$	85.2		$	92.2		$	(7.0	)	$	4.7		$	(2.4	)	$	(6.1	)	$	(0.3	)	$	(2.9	)

(a)Includes changes in selling price and product mix.

(b)Includes price changes for raw materials and energy.

(c)Includes other manufacturing costs, over (under) absorption of fixed costs, distribution and SG&A expenses, start-up and other costs for the U.S. filtration business, insurance settlement, and integration/restructuring costs.

Consolidated operating income of $85.2 million for the nine months ended September 30, 2017 decreased $7.0 million from the prior year period. The decline was primarily due to higher losses resulting from the U.S. filtration business start-up phase, as well as increased input and transportation costs, and a lower value mix in Fine Paper & Packaging. These items were only partially offset by higher volumes and selling prices, proceeds from an insurance settlement, improved operational efficiencies and lower SG&A spending. Excluding an insurance settlement of $3.2 million and integration and restructuring costs of $0.9 million and $3.7 million for 2017 and 2016, respectively, operating income decreased $13.0 million.

• Operating income for our technical products business decreased $9.3 million from the prior year period primarily due to higher manufacturing costs, including losses from the U.S. filtration business start-up phase, and other unfavorable impacts from higher material and transportation costs, additional downtime in Germany and unfavorable currency effects. These items were partially offset by benefits from higher sales mix, manufacturing efficiencies, and lower integration and restructuring costs. Excluding integration and restructuring costs of $0.6 million for 2016, operating income decreased $9.9 million from the prior year.

• Operating income for our fine paper and packaging business increased $2.4 million from the prior year period as a result of higher sales volume, manufacturing efficiencies and lower integration costs, and an insurance settlement of $2.9 million, that were partially offset by lower priced product mix, unplanned downtime and higher material and transportation costs. Excluding the insurance settlement of $2.9 million for 2017 and integration and restructuring costs of $1.1 million for 2016, operating income decreased $1.6 million.

• Unallocated corporate expenses for the nine months ended September 30, 2017 of $14.6 million was $0.1 million higher than the prior year period. Excluding acquisition and integration costs of $0.9 million and $1.4 million for 2017 and 2016, respectively, unallocated corporate expenses increased $0.6 million.

F-18

The following table sets forth our operating income by segment, adjusted for the effects of integration and restructuring costs, for the periods indicated: 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating income
Technical Products	$	15.6		$	14.1		$	44.1		$	53.4
Fine Paper and Packaging	17.8			17.3			55.6			53.2
Other	0.2			0.1			0.1			0.1
Unallocated corporate costs	(4.6		)	(4.6		)	(14.6		)	(14.5		)
Operating Income as Reported	$	29.0		$	26.9		$	85.2		$	92.2
Adjustments to Reported Operating Income
Technical Products
Integration/Restructuring costs	—			0.1			—			0.6
Fine Paper and Packaging
Insurance settlement	(2.9		)	—			(2.9		)	—
Integration/Restructuring costs	—			0.3			—			1.1
Other
Insurance settlement	(0.3		)	—			(0.3		)	—
Integration/Restructuring costs	—			—			—			0.6
Unallocated corporate costs
Acquisition/Restructuring costs	0.9			0.8			0.9			1.4
Total Adjustments to Reported Operating Income	(2.3		)	1.2			(2.3		)	3.7
Operating Income as Adjusted	$	26.7		$	28.1		$	82.9		$	95.9

In accordance with generally accepted accounting principles in the United States (“GAAP”), consolidated operating income includes the pre-tax effects of insurance settlement, acquisition, integration, and restructuring costs. We believe that by adjusting reported operating income to exclude the effects of these items, the resulting adjusted operating income is on a basis that reflects the results of our ongoing operations. We believe that providing adjusted operating results will help investors gain an additional perspective of underlying business trends and results. Adjusted operating income is not a recognized term under GAAP and should not be considered in isolation or as a substitute for operating income derived in accordance with GAAP. Other companies may use different methodologies for calculating their non-GAAP financial measures and, accordingly, our non-GAAP financial measures may not be comparable to their measures.

Additional Statement of Operations Commentary:

• SG&A expense of $21.4 million for the three months ended September 30, 2017 was $0.4 million higher than SG&A expense of $21.0 million in the prior year period. For the three months ended September 30, 2017, SG&A expense as a percent of sales decreased to 8.7 percent from 9.0 percent in the prior year period.

SG&A expense of $70.9 million for the nine months ended September 30, 2017 was $0.9 million lower than SG&A expense of $71.8 million in the prior year period. For the nine months ended September 30, 2017, SG&A expense as a percent of sales decreased to 9.6 percent from 10.0 percent in the prior year period.

• For the three months ended September 30, 2017, we incurred net interest expense of $3.2 million which was higher than the $2.7 million for prior year period, primarily due to capitalization of interest of $0.3 million for the U.S. filtration project in 2016 and higher interest rates.

For the nine months ended September 30, 2017, we incurred net interest expense of $9.4 million which was higher than the $8.3 million for prior year period, primarily due to capitalization of interest of $0.7 million for the U.S. filtration project in 2016 and higher interest rates.

• Historically, our effective tax rate differed from the U.S. statutory tax rate of 35 percent primarily due to the proportion of pre-tax income in jurisdictions with marginal tax rates that differ from the U.S. statutory tax rate, research and development and other tax credits and excess tax benefits from stock compensation. In June 2017, as part of our annual strategic plan review, we reassessed our intentions regarding the indefinite reinvestment of undistributed

F-19

earnings of our German operations and asserted our intent to indefinitely reinvest them under ASC 740, Income Taxes. Accordingly, we are no longer providing deferred income taxes on the 2017 unremitted earnings of our German operations. For the three months ended September 30, 2017 and 2016, we recorded an income tax provision of $7.0 million and $7.8 million, respectively. The effective income tax rate of 27 percent for the three months ended September 30, 2017 was lower than the tax rate of 32 percent for the three months ended September 30, 2016 due to the indefinite reinvestment assertion. For further detail refer to Note 1, "Background and Basis of Presentation - Income Taxes".

Liquidity and Capital Resources

	Nine Months Ended September 30,
	2017			2016
Net cash flow provided by (used in):
Operating activities	$	81.6		$	97.7
Investing activities:
Capital expenditures	(27.2		)	(49.4		)
Asset acquisition	(8.0		)	—
Other investing activities	(0.3		)	(0.1		)
Total	(35.5		)	(49.5		)
Financing activities:
Net repayments of long-term debt	0.2			(20.4		)
Other financing activities	(25.5		)	(24.5		)
Total	(25.3		)	(44.9		)
Effect of exchange rate changes on cash and cash equivalents	0.3			(0.2		)
Net increase in cash and cash equivalents	$	21.1		$	3.1

Operating Cash Flow Commentary

• Cash provided by operating activities of $81.6 million for the nine months ended September 30, 2017 was $16.1 million lower than cash provided by operating activities of $97.7 million in the prior year period. The unfavorable comparison was primarily due to an increased investment in working capital, largely in accounts receivable.

Investing Commentary:

• For the nine months ended September 30, 2017 and 2016, cash used by investing activities was $35.5 million and $49.5 million, respectively, primarily due to the U.S. Filtration project, which was completed in 2016. We acquired a laminating asset for $8.0 million in the third quarter of 2017 to support continued growth in our premium packaging business. For the full year 2017, we expect capital expenditures of approximately $45 million, which is within our normal range of approximately 3 to 5 percent of net sales.

Financing Commentary:

Our liquidity requirements are provided by cash generated from operations and short and long-term borrowings.

• For the nine months ended September 30, 2017 and 2016, cash used in financing activities was $25.3 million and $44.9 million, respectively. Cash used in financing activities consists primarily of dividends paid, share repurchases, and net repayments of long-term debt.

• Availability under our revolving credit facility varies over time depending on the value of our inventory, receivables and various capital assets. As of September 30, 2017, we had $43.9 million outstanding under our Global Revolving Credit Facilities and $125.9 million of available credit (based on exchange rates at September 30, 2017).

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• We have required debt principal payments through September 30,2018 of $1.3 million for principal payments on the German loan agreement.

• For the nine months ended September 30, 2017, cash and cash equivalents increased $21.1 million to $24.2 million at September 30, 2017 from $3.1 million at December 31, 2016. Total debt increased $2.0 million to $222.9 million at September 30, 2017 from $220.9 million at December 31, 2016. Net debt (total debt minus cash and cash equivalents) decreased by $19.1 million.

• As of September 30, 2017, our cash balance of $24.2 million consists of $4.8 million in the U.S. and $19.4 million held at entities outside of the U.S. As of September 30, 2017, there were no restrictions regarding the repatriation of our non-U.S. cash. However, the repatriation of these cash balances to the U.S. would increase our income tax provision since the earnings are asserted to be indefinitely reinvested.

Transactions With Shareholders

• In November 2016, our Board of Directors approved a 12 percent increase in the quarterly dividend rate on our common stock, to $0.37 per share, effective with the March 2017 dividend payment. For the nine months ended September 30, 2017 and 2016, we paid cash dividends of $1.11 per common share or $18.9 million and $0.99 per common share or $16.8 million, respectively.

• Purchases under the 2017 Stock Purchase Plan will be made from time to time in the open market or in privately negotiated transactions in accordance with the requirements of applicable law. The timing and amount of any purchases will depend on share price, market conditions and other factors. The 2017 Stock Purchase Plan does not require us to purchase any specific number of shares and may be suspended or discontinued at any time. For the nine months ended September 30, 2017 and 2016, we repurchased approximately 85,400 shares of Common Stock at a cost of $6.8 million and 127,400 shares of Common Stock at a cost of $7.8 million, respectively. We did not repurchase shares during the three months ended September 30, 2017. For further details on our Stock Purchase Plans refer to Note 7.

Other Items:

• As of September 30, 2017, we had $25.0 million of U.S. federal and state research and development ("R&D") Credits which, if not used, will expire between 2030 and 2037 for the U.S. federal R&D Credits and between 2017 and 2032 for the state R&D Credits. We reflected a valuation allowance of $3.4 million against a portion of the R&D Credits. In addition, as of September 30, 2017, we had $43.6 million of state net operating losses ("NOLs"). Our state NOLs may be used to offset approximately $2.1 million in state income taxes. If not used, substantially all of the state NOLs will expire in various amounts between 2017 and 2037.

Management believes that our ability to generate cash from operations and our borrowing capacity are adequate to fund working capital, capital spending and other cash needs for the next 12 months. Our ability to generate adequate cash from operations beyond 2017 will depend on, among other things, our ability to successfully implement our business strategies, control costs in line with market conditions and manage the impact of changes in input prices and currencies. We can give no assurance we will be able to successfully implement these items.

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Critical Accounting Policies and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. We believe that the estimates, assumptions and judgments described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” of our most recent Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. The critical accounting policies used in the preparation of the consolidated financial statements are those that are important both to the presentation of financial condition and results of operations and require significant judgments with regard to estimates used. These critical judgments relate to the timing of recognizing sales revenue, the recoverability of deferred income tax assets, pension benefits and future cash flows associated with impairment testing of long-lived assets. Actual results could differ from these estimates and changes in these estimates are recorded when known. We believe that the consistent application of these policies enables us to provide readers of our financial statements with useful and reliable information about our operating results and financial condition.  There have been no significant changes in these policies, or the estimates used in the application of the policies, since December 31, 2016.

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Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), or in releases made by the SEC, all as may be amended from time to time. Statements contained in this quarterly report that are not historical facts may be forward-looking statements within the meaning of the PSLRA and we caution investors that any forward-looking statements we make are not guarantees or indicative of future performance. These forward-looking statements rely on a number of assumptions concerning future events and are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not necessarily limited to, those set forth under the captions “Cautionary Note Regarding Forward-Looking Statements” and/or “Risk Factors” of our latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Qs (these securities filings can be located on our website at www.neenah.com). Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.

You can identify forward-looking statements as those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “contemplate,” “estimate,” “believe,” “plan,” “project,” “predict,” “potential” or “continue,” or the negative of these, or similar terms. In evaluating these forward-looking statements, you should consider the following factors, as well as others contained in our public filings from time to time, which may cause our actual results to differ materially from any forward-looking statement:

• changes in market demand for our products due to global economic conditions;

• the impact of competition, both domestic and international, changes in industry production capacity, including the construction of new mills or new machines, the closing of mills and incremental changes due to capital expenditures or productivity increases;

• the enactment of adverse state, federal or foreign tax or other legislation or changes in government policy or regulation;

• fluctuations in (i) exchange rates (in particular changes in the U.S. dollar/Euro currency exchange rates) and (ii) interest rates;

• increases in commodity prices, (particularly for pulp, energy and latex) due to constrained global supplies or unexpected supply disruptions;

• the availability of raw materials and energy;

• strikes, labor stoppages and changes in our collective bargaining agreements and relations with our employees and unions;

• capital and credit market volatility and fluctuations in global equity and fixed-income markets;

• unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations;

• our ability to control costs and implement measures designed to enhance operating efficiencies;

• the loss of current customers or the inability to obtain new customers;

• loss of key personnel;

• increases in the funding requirements for our pension and postretirement liabilities;

• changes in asset valuations including write-downs of assets including property, plant and equipment, inventory, accounts receivable, deferred tax assets or other assets for impairment or other reasons;

• our existing and future indebtedness;

• our ability to successfully integrate acquired businesses into our existing operations;

• our NOLs may expire before we are able to offset our tax liabilities; and

• other risks that are detailed from time to time in reports we file with the SEC.

Any subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above, as well as the risk factors contained in our most recent Annual Report on Form 10-K. Except as required by law, we disclaim any obligation to update such statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, 2016.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management in a timely manner.

As of September 30, 2017, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of September 30, 2017.

Internal Controls over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the nine months ended September 30, 2017. Based on that evaluation, we have concluded that there has been no change in our internal control over financial reporting during the nine months ended September 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings

See Note 8, “Contingencies and Legal Matters” of Notes to Condensed Consolidated Financial Statements of Item 1 — Financial Statements.

Item 1A.  Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities:

The following table contains information about our purchases of our equity securities for the three months ended September 30, 2017.

Months in 2017	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs (a)
July	—	$	—	—	$	25,000,000
August	492	$	80.25	—	$	25,000,000
September	2,583	$	77.25	—	$	25,000,000

(a) As of September 30, 2017, the Company has purchased approximately 176,896 shares of Common Stock at an aggregate cost of $14.2 million under the 2017 Stock Purchase Plan and 2016 Stock Purchase Plan.  For further discussion on the share repurchase plans refer to Note 7.

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Item 6.  Exhibits

Exhibit Number	Exhibit
10.1	Third Amendment, dated as of August 30, 2017, to the Third Amended and Restated Credit Agreement dated December 18, 2014 by and among Neenah Paper, Inc., certain of its subsidiaries, the lenders listed therein and JPMorgan Chase Bank, N.A., as agent for the Lenders.
31.1	Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document (filed herewith).
101.SCH	XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NEENAH PAPER, INC
	By:	/s/ John P. O'Donnell
		John P. O’Donnell
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
		/s/ Bonnie C. Lind
		Bonnie C. Lind
		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
		/s/ Larry N. Brownlee
		Larry N. Brownlee
		Vice President — Controller (Principal Accounting Officer)
November 8, 2017

EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This Third Amendment to Third Amended and Restated Credit Agreement (this “Third Amendment”) is made and entered into as of August 30, 2017 (the “Third Amendment Effective Date”), by and among Neenah Paper, Inc., a Delaware corporation (the “Company”), certain Domestic Subsidiaries of the Company, as borrowers (the “Domestic Borrowers”), Neenah Services GmbH & Co. KG and certain of its Subsidiaries, as borrowers (the “German Borrowers”), the other guarantors party hereto (such guarantors, together with the Domestic Borrowers and the German Borrowers, being collectively referred herein as the “Loan Parties”), the Lenders party hereto and JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent (the “Agent”).

RECITALS:

WHEREAS, the Loan Parties are parties to that certain Third Amended and Restated Credit Agreement, dated as of December 18, 2014 (as amended by that certain First Amendment to Third Amended and Restated Credit Agreement, dated as of July 28, 2016, by that certain Second Amendment to Third Amended and Restated Credit Agreement, dated as of December 13, 2016, and as further amended, restated, supplement or modified from time to time, the “Credit Agreement”), by and among the Loan Parties, the financial institutions signatory thereto as lenders (individually, a “Lender” and collectively, the “Lenders”), and the Agent. Capitalized terms used but not defined herein have the meaning set forth in the Credit Agreement.

WHEREAS, the Loan Parties have requested that the Credit Agreement be amended as hereinafter provided.

WHEREAS, subject to and upon the terms and conditions contained herein, the Lenders have agreed to the Loan Parties’ requests as set forth herein.

NOW THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.Amendments to the Credit Agreement. In reliance upon the representations, warranties, covenants and conditions contained in this Third Amendment, and subject to the terms, and satisfaction of the conditions precedent set forth in Section 2 hereof, the Credit Agreement is hereby amended as of the Third Amendment Effective Date in the manner provided in this Section 1.

1.1Amendments to Definitions.

(a)The definition of “EBITDA” is hereby amended by deleting clause (f) thereof in its entirety and by substituting the following in lieu thereof:

“(f) any non-recurring fees, cash charges and other cash expenses paid or incurred in connection with any merger, consolidation or acquisition permitted under Section 6.04, in an aggregate amount not to exceed $1,500,000,”

(b)The definition of “Excluded Assets” is hereby amended by deleting clause (f) thereof in its entirety and by substituting the following in lieu thereof:

“(f) payroll accounts, trust accounts, employee benefit accounts and zero-balance disbursement accounts (that are not collection accounts), and any Deposit Account of a Foreign Subsidiary that, pursuant to Section 6.18, is not required to be a Controlled Account,”

(c)The definition of "Inter-Company Loans" is deleted in its entirety and the following substituted in lieu thereof:

“Inter-Company Loans” means collectively, (a) the inter-company loans made from time to time by the Company to NP International Holdco to finance, by means of loans described in clauses (b), (c) and (d), the 2006 Acquisition of Neenah Germany, the substantially contemporaneous payment of the purchase price for any Permitted Offshore Acquisitions and the non-acquisition-related activities of NP International HoldCo and any of its direct or indirect subsidiaries from time to time; provided that such inter-company loans are permitted under Section 6.07; (b) advances from time to time under the inter-company revolving line of credit from NP International HoldCo to FinCo, evidenced by the FinCo Note, which line of credit shall be used to provide FinCo with funds to finance, by means of loans described in clause (c), the activities of NP International and any of its direct or indirect subsidiaries, to the extent permitted under this Agreement; (c) the inter-company loans made from time to time by FinCo to NP International to finance the 2006 Acquisition of Neenah Germany, the substantially contemporaneous payment of the purchase price for any Permitted Offshore Acquisitions and the activities of NP International and any of its direct or indirect subsidiaries, to the extent permitted under this Agreement; (d) the inter-company loans made from time to time by NP International HoldCo to NP International and/or any of NP International HoldCo’s direct or indirect subsidiaries, to finance the substantially contemporaneous payment of the purchase price for any Permitted Offshore Acquisitions by NP International or any of its direct or indirect subsidiaries, and the activities of NP International and any of its subsidiaries, to the extent permitted under this Agreement; (e) inter-company loans made from time to time by NP International to the Company, not to exceed $22,000,000 at any one time outstanding, to finance all or a part of the purchase price for anticipated Acquisitions by the Company (either directly, or indirectly through any Subsidiary that is a Loan Party), to the extent permitted under this Agreement, or for other corporate purposes not prohibited under this Agreement; provided that, in the case of inter-company loans made pursuant to this clause (e), (i) such inter-company loans shall be unsecured Subordinated Indebtedness of the Company and (ii) repayment of such inter-company loans shall be made only to the extent permitted by Section 6.11(f); (f) an unsecured subordinated intercompany loan to be made by NP International to the Company on or about the Effective Date with proceeds from the initial Borrowing under the German Tranche Commitments, not to exceed $50,000,000, to finance the growth of the Domestic Loan Parties’ filtration business, to the extent permitted under this Agreement; (g) any unsecured subordinated inter-company loans made from time to time by a Domestic Loan Party, directly or indirectly, to any German Borrower, in order to enable the German Borrower Excess Utilization of such German Borrower to be eliminated; (h) inter-company loans made from time to time by a German

Borrower to another German Borrower, in order to enable the German Borrower Excess Utilization of the latter German Borrower to be eliminated; (i) inter-company loans under any German cash pooling system operated between some or all of the German Borrowers in the manner as in effect on the date hereof; (j) inter-company loans based on book entries into virtual offset-accounts operated between the German Loan Parties and reflecting transactions between such German Loan Parties, or virtual offset accounts between a German Loan Party and Neenah Gessner Unterstützungskasse GmbH or Leiss-GmbH & Co. KG reflecting transactions not otherwise prohibited hereunder; and (k) unsecured loans existing as of the Third Amendment Effective Date from ASP FiberMark, LLC to Neenah International UK Limited, a company formed under the laws of England and Wales and a Subsidiary of ASP FiberMark, LLC, not to exceed $10,000,000 at any one time outstanding, and any refinancing thereof in an amount not exceeding $10,000,000 at any time outstanding.”

(d)The definition of “Loan Documents” is hereby amended by inserting the words and punctuation, “the Third Amendment,” immediately after “the Second Amendment,” contained in such definition.

(e)The definition of “Permitted Offshore Acquisitions” is hereby amended by inserting the words "the Company or" immediately prior to the reference therein to “NP International HoldCo”.

1.2Amendments to Definitions. Section 1.01 of the Credit Agreement is amended to add thereto in alphabetical order the following definitions which shall read in full as follows:

“IKB Loan (RTO)” means the loan made or to be made to German Borrower B in the maximum principal amount of €5,000,000 pursuant to a loan agreement to be entered into among German Borrower B, as borrower, German Borrower A, as guarantor, if applicable, and IKB Deutsche Industriebank AG or another German financial institution, as lender.

“Third Amendment” means that certain Third Amendment to Third Amended and Restated Credit Agreement dated as of August 30, 2017, by and among the Borrowers, the other Loan Parties, the Administrative Agent and the Lenders party thereto.”

“Third Amendment Effective Date” means August 30, 2017, being the effective date of the Third Amendment.

1.3Amendment to Section 6.01 of the Credit Agreement. Section 6.01 of the Credit Agreement is amended by deleting clause (o) thereof in its entirety and by substituting the following in lieu thereof, as a new clause (o):

“(o)Indebtedness now or hereafter owing by the German Loan Parties (i) in connection with the IKB Loan secured by one piece of Equipment (a Meltblown machine including certain supporting Equipment), and (ii) in connection with the IKB Loan (RTO) secured by one piece of Equipment (a regenerative thermal oxidizer including certain supporting Equipment);”

1.4Amendments to Section 6.18 of the Credit Agreement. Section 6.18 of the Credit Agreement is amended by: (i) inserting the phrase, “Subject to the last two sentences of this

Section 6.18,” at the beginning of said Section, immediately preceding clause (a) thereof; (ii) changing “Establish” at the beginning of said clause (a) to read “establish”; and (iii) adding the following sentences at the end of Section 6.18 as follows:

“Notwithstanding anything to the contrary contained in the foregoing provisions of this Section 6.18, (A) any Loan Party that is a Foreign Subsidiary not formed under the laws of Germany and whose primary purpose is to own the Equity Interests of one or more other Foreign Subsidiaries, shall be permitted to establish and maintain a deposit account that is not subject to a Tri-Party Agreement, provided that, the balance on hand at any time in such deposit account does not exceed the sum of (1) €25,000, plus (2) amounts received by such Loan Party from time to time as capital contributions or proceeds of any intercompany Indebtedness permitted under Section 6.01(f) that are held for not more than five (5) Business Days (or such longer period as the Administrative Agent may approve in writing from time to time) pending application to the costs of making any Acquisition permitted under the provisions of Section 6.04, plus (3) amounts received by such Loan Party from time to time as dividends or distributions from any of such Loan Party’s direct or indirect Subsidiaries permitted under Section 6.11, and that are held in such deposit account for not more than five (5) Business Days (or such longer period as the Administrative Agent may approve in writing from time to time) pending application of such amounts to the payment of either (x) principal, interest or other amounts due in respect of intercompany Indebtedness permitted under the provisions of Section 6.01(f), (y) Taxes or (z) dividends or distributions permitted to be paid by such Loan Party to another Loan Party which is the direct parent of such Loan Party; provided that, in the event the amount held in any deposit account referred to in the immediately preceding sentence exceeds the permissible amount, the Loan Party that owns such deposit account shall promptly notify the Administrative Agent thereof and shall cause such account to become subject to a Tri-Party Agreement within thirty (30) days of the occurrence thereof (or within such longer period as the Administrative Agent may approve in writing from time to time); and (B) any Foreign Subsidiary not formed under the laws of Germany that becomes a German Loan Party after the Third Amendment Effective Date shall be permitted to maintain deposit accounts that are not subject to a Tri-Party Agreement for a period of sixty (60) days commencing on the date such Foreign Subsidiary becomes a German Loan Party (or such longer period as the Administrative Agent may approve in writing from time to time); provided that, upon the expiration of such sixty (60) day period (or such longer period as the Administrative Agent may approve in writing from time to time), all deposit accounts maintained and/or thereafter established by such Loan Party must be Controlled Accounts or accounts of the type described in clause (c) of this Section 6.18.”

1.5Amendment to Section 11.14 of the Credit Agreement. Section 11.14(d) of the Credit Agreement is hereby amended by deleting the word “or” at the end of clause (iii), replacing the period at the end of clause (iv) with “; or” and adding the following clause (v):

“(v) if such German Loan Party is not organized under the laws of Germany.”

SECTION 2.Conditions Precedent to Third Amendment. This Third Amendment will be effective as of the Third Amendment Effective Date, on the condition that the following conditions precedent will have been satisfied:

2.1Counterparts. The Agent shall have received counterparts of this Third Amendment duly executed by each of the Loan Parties, the Agent, and the Required Lenders (or, in the case of any party as to which an executed counterpart shall not have been received, telegraphic, telex, or other written confirmation from such party of execution of a counterpart hereof by such party).

2.2Expenses. To the extent invoiced, the Agent shall have received payment or reimbursement of its out-of-pocket expenses in connection with this Third Amendment and any other out-of-pocket expenses of the Agent required to be paid or reimbursed pursuant to the Credit Agreement, including the reasonable fees, charges and disbursements of counsel for the Agent.

2.3Other Documents. The Agent shall have been provided with such documents, instruments and agreements, and the Loan Parties shall have taken such actions, in each case as the Agent may reasonably require in connection with this Third Amendment and the transactions contemplated hereby.

SECTION 3.Representations and Warranties. The Loan Parties hereby represent and warrant to the Lenders the following (provided that such representations and warranties of the German Loan Parties shall be limited to the facts and circumstances of the German Loan Parties and their Subsidiaries):

3.1the representations and warranties contained in the Credit Agreement, as amended hereby, and the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date, and except for any change of facts expressly permitted under the provisions of the Credit Agreement and the other Loan Documents;

3.2no Default or Event of Default has occurred and is continuing under the Credit Agreement; and

3.3this Third Amendment has been duly executed and delivered by the Loan Parties, and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of the Loan Parties, enforceable against the Loan Parties in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 4.No Waiver. Nothing contained in this Third Amendment shall be construed as a waiver by the Lenders of any covenant or provision of the Credit Agreement, the other Loan Documents, or of any other contract or instrument between the Loan Parties and any of the Lenders, and the failure of the Lenders at any time or times hereafter to require strict performance by the Loan Parties of any provision thereof shall not waive, affect or diminish any right of the Lenders to thereafter demand strict compliance therewith. The Agent and the Lenders hereby reserve all rights granted under the Credit Agreement, the other Loan Documents, this Third Amendment and any other contract or instrument between the Loan Parties and the Lenders.

SECTION 5.Survival of Representations and Warranties. All representations and warranties made in this Third Amendment, including any Loan Document furnished in connection with this Third Amendment, shall survive the execution and delivery of this Third Amendment and the other Loan Documents, and no investigation by the Agent or any closing shall affect the representations and warranties or the right of the Agent to rely upon them.

SECTION 6.Expenses. As provided in Section 9.03 of the Credit Agreement and subject to the limitations expressly set forth therein, the Loan Parties hereby agree to pay on demand all legal and other fees, costs and expenses incurred by the Agent in connection with the negotiation, preparation, and execution of this Third Amendment and all related documents.

SECTION 7.Severability. Any provision of this Third Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 8.APPLICABLE LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.Successors and Assigns. This Third Amendment is binding upon and shall inure to the benefit of the Credit Parties and the Loan Parties and their respective successors and assigns, except the Loan Parties may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Agent, other than as expressly permitted under the terms of the Credit Agreement.

SECTION 10.Counterparts. This Third Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original but all of which when taken together shall constitute but one and the same instrument. Delivery of an executed signature page of this Third Amendment by facsimile transmission or PDF electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 11.Effect of Consent. No consent or waiver, express or implied, by the Agent to or for any breach of or deviation from any covenant, condition or duty by the Loan Parties shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

SECTION 12.Headings. The headings of this Third Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 13.Reaffirmation of Loan Documents. This Third Amendment shall be deemed to be an amendment to the Credit Agreement, and the Credit Agreement, as amended hereby, and the other Loan Documents are hereby ratified, approved and confirmed in each and every respect. All references to the Credit Agreement herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Credit Agreement as amended hereby.

SECTION 14.Loan Document. This Third Amendment constitutes a “Loan Document” under and as defined in the Credit Agreement.

SECTION 15.Entire Agreement. THE CREDIT AGREEMENT, THIS THIRD AMENDMENT, THE OTHER LOAN DOCUMENTS, AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS THIRD AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the date set forth above.

LOAN PARTIES:

DOMESTIC BORROWERS:

NEENAH PAPER, INC.

NEENAH PAPER MICHIGAN, INC.

NEENAH FILTRATION, LLC

NEENAH TECHNICAL MATERIALS, INC.

NEENAH PAPER FVC, LLC

NEENAH PAPER FR, LLC

NEENAH FMK HOLDINGS, LLC

ASP FIBERMARK, LLC

NEENAH NORTHEAST, LLC

Neenah Filtration Appleton, LLC

By:/s/ Bonnie C. Lind

Name: Bonnie C. Lind

Title: Senior Vice President, Chief Financial

Officer and Treasurer

NPCC HOLDING COMPANY, LLC

By: Neenah Paper, Inc., as its sole member

By:/s/ Bonnie C. Lind

Name: Bonnie C. Lind

Title: Senior Vice President, Chief Financial

Officer and Treasurer

GERMAN BORROWERS:

Neenah Services GmbH & Co. KG

By:/s/ Armin Schwinn

Name: Armin Schwinn

Title: Managing Director of Neenah Germany

GmbH (general partner)

Neenah Gessner GmbH

By:/s/ Armin Schwinn

Name: Armin Schwinn

Title: Managing Director

Neenah GESSNER Grundstücksverwaltungsgesellschaft mbH & Co. KG

By:/s/ Armin Schwinn

Name: Armin Schwinn

Title: Managing Director of Neenah Germany

GmbH (general partner)

GERMAN GUARANTORS:

Neenah Germany GmbH

By:/s/ Armin Schwinn

Name: Armin Schwinn

Title: Managing Director

NEENAH PAPER INTERNATIONAL HOLDING COMPANY, LLC

By: Neenah Paper, Inc., as its sole member

By:/s/ Bonnie C. Lind

Name: Bonnie C. Lind

Title: Senior Vice President, Chief Financial

Officer and Treasurer

Neenah Paper International, LLC

By:/s/ Bonnie C. Lind

Name: Bonnie C. Lind

Title: Senior Vice President, Chief Financial

Officer and Treasurer

Neenah Paper International Finance Company B.V.

By:/s/ Bonnie C. Lind

Name:Bonnie C. Lind

Title:Managing Director

By:/s/ E.T. Veerman

Name:TMF Netherlands B.V.

Title:Managing Director B

JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank, Swingline Lender and a Domestic Tranche Lender

By: /s/ Jennifer Heard

Name: Jennifer Heard

Title: Authorized Officer

J.P. MORGAN EUROPE LIMITED, as German Collateral Agent

By: /s/ Kennedy A. Capin

Name: Kennedy A. Capin

Title: Authorized Officer

JPMORGAN CHASE BANK, N.A. (LONDON BRANCH), as a German Tranche Lender

By: /s/ Kennedy A. Capin

Name: Kennedy A. Capin

Title: Authorized Officer

BANK OF AMERICA, N.A., as a Domestic Tranche Lender

By: /s/ Dennis S. Losin

Name: Dennis S. Losin

Title: Senior Vice President

BANK OF AMERICA, N.A., as a German Tranche Lender

By: /s/ Dennis S. Losin

Name: Dennis S. Losin

Title: Senior Vice President

COMMERZBANK AG, NEW YORK & GRAND CAYMAN BRANCHES, as a Domestic Tranche Lender

By: /s/ Marie Duflos

Name: Marie Duflos

Title: Director

By: /s/ Anne Culver

Name: Anne Culver

Title: Vice President

BMO HARRIS BANK, N.A., as a Domestic Tranche Lender

By: /s/ Jason Hoefler

Name: Jason Hoefler

Title: Managing Director

BMO HARRIS BANK, N.A., as a German Tranche Lender

By: /s/ Jason Hoefler

Name: Jason Hoefler

Title: Managing Director

GOLDMAN SACHS BANK USA, as a Domestic Tranche Lender

By: /s/ Chris Lam

Name: Chris Lam

Title: Authorized Signatory

GOLDMAN SACHS BANK USA, as a German Tranche Lender

By: /s/ Chris Lam

Name: Chris Lam

Title: Authorized Signatory

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, John P. O’Donnell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Neenah Paper, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2017
	/s/ John P. O’Donnell
	John P. O’Donnell
	President, Chief Executive Officer, and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Bonnie C. Lind, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Neenah Paper, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2017
	/s/ Bonnie C. Lind
	Bonnie C. Lind
	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Neenah Paper, Inc. (the “Company”) on Form 10-Q for the period ended September 30,2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. O’Donnell, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(a)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John P. O’Donnell

John P. O’Donnell

President, Chief Executive Officer and Director

(Principal Executive Officer)

Date: November 8, 2017

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Neenah Paper, Inc. (the “Company”) on Form 10-Q for the period ended September 30,2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bonnie C. Lind, Senior Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(a)         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b)         The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Bonnie C. Lind

Bonnie C. Lind

Senior Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer)

Date: November 8, 2017

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 02, 2017
Document and Entity Information
Entity Registrant Name	Neenah Paper Inc
Entity Central Index Key	0001296435
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		16,818,390
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Net sales	$ 245.1	$ 232.9	$ 735.9	$ 721.0
Cost of products sold	197.1	183.7	582.3	553.0
Gross profit	48.0	49.2	153.6	168.0
Selling, general and administrative expenses	21.4	21.0	70.9	71.8
Acquisition/integration/restructuring costs	0.9	1.2	0.9	3.7
Insurance settlement	(3.2)	0.0	(3.2)	0.0
Other (income) expense - net	(0.1)	0.1	(0.2)	0.3
Operating income	29.0	26.9	85.2	92.2
Interest expense - net	3.2	2.7	9.4	8.3
Income from continuing operations before income taxes	25.8	24.2	75.8	83.9
Provision for income taxes	7.0	7.8	14.4	26.9
Income from continuing operations	18.8	16.4	61.4	57.0
Loss from discontinued operations, net of income taxes	0.0	0.0	0.0	(0.4)
Net income	$ 18.8	$ 16.4	$ 61.4	$ 56.6
Basic
Continuing operations (in dollars per share)	$ 1.11	$ 0.97	$ 3.63	$ 3.36
Discontinued operations (in dollars per share)	0.00	0.00	0.00	(0.02)
Basic earnings per share (in dollars per share)	1.11	0.97	3.63	3.34
Diluted
Continuing operations (in dollars per share)	1.10	0.95	3.58	3.30
Discontinued operations (in dollars per share)	0.00	0.00	0.00	(0.02)
Diluted (in dollars per share)	$ 1.10	$ 0.95	$ 3.58	$ 3.28
Weighted Average Common Shares Outstanding (in thousands)
Basic (in shares)	16,811	16,771	16,794	16,774
Diluted (in shares)	16,974	17,088	17,034	17,068
Cash dividends declared per share of common stock (in usd per share)	$ 0.37	$ 0.33	$ 1.11	$ 0.99

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 18.8	$ 16.4	$ 61.4	$ 56.6
Unrealized foreign currency translation gain	5.0	0.7	16.1	0.9
Reclassification of amortization of adjustments to pension and other postretirement benefit liabilities recognized in net periodic benefit cost (Note 5)	1.4	1.9	4.6	5.5
Net gain (loss) from pension and other postretirement benefit plans (Note 3)	0.2	0.0	(1.0)	0.0
Unrealized gain on “available-for-sale” securities	0.0	0.0	0.1	0.1
Income from other comprehensive income items	6.6	2.6	19.8	6.5
Provision for income taxes	0.5	0.7	1.4	2.1
Other comprehensive income	6.1	1.9	18.4	4.4
Comprehensive income	$ 24.9	$ 18.3	$ 79.8	$ 61.0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 24.2	$ 3.1
Accounts receivable (less allowances of $1.7 million and $1.5 million)	122.7	96.5
Inventories	124.3	116.3
Prepaid and other current assets	17.4	20.4
Total Current Assets	288.6	236.3
Property, Plant and Equipment
Property, Plant and Equipment, at cost	800.1	755.6
Less accumulated depreciation	418.7	391.0
Property, plant and equipment—net	381.4	364.6
Deferred Income Taxes	10.1	6.1
Goodwill	74.3	70.4
Intangible Assets—net	73.5	74.0
Other Noncurrent Assets	18.9	14.2
TOTAL ASSETS	846.8	765.6
Current Liabilities
Debt payable within one year	1.3	1.2
Accounts payable	60.9	55.6
Accrued expenses	52.2	51.2
Total Current Liabilities	114.4	108.0
Long-term Debt	221.6	219.7
Deferred Income Taxes	20.8	10.1
Noncurrent Employee Benefits	86.3	86.7
Other Noncurrent Obligations	6.8	2.8
TOTAL LIABILITIES	449.9	427.3
Contingencies and Legal Matters (Note 8)	0.0	0.0
TOTAL STOCKHOLDERS’ EQUITY	396.9	338.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 846.8	$ 765.6

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 1.7	$ 1.5

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
OPERATING ACTIVITIES
Net income	$ 61.4	$ 56.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	24.3	24.0
Stock-based compensation	4.3	4.4
Deferred income tax provision	4.4	10.4
Non-cash effects of changes in liabilities for uncertain income tax positions	0.2	0.0
Loss on asset dispositions	0.2	0.1
(Increase) decrease in working capital	(12.2)	4.7
Pension and other postretirement benefits	(1.1)	(2.3)
Other	0.1	(0.2)
NET CASH PROVIDED BY OPERATING ACTIVITIES	81.6	97.7
INVESTING ACTIVITIES
Capital expenditures	(27.2)	(49.4)
Asset acquisition	(8.0)	0.0
Purchase of marketable securities	0.0	(0.1)
Other	(0.3)	0.0
NET CASH USED IN INVESTING ACTIVITIES	(35.5)	(49.5)
FINANCING ACTIVITIES
Long-term borrowings (Note 4)	212.3	185.9
Repayments of long-term debt (Note 4)	(212.1)	(206.3)
Cash dividends paid	(18.9)	(16.8)
Shares purchased (Note 7)	(7.0)	(8.0)
Proceeds from exercise of stock options	0.4	0.3
NET CASH USED IN FINANCING ACTIVITIES	(25.3)	(44.9)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	0.3	(0.2)
NET INCREASE IN CASH AND CASH EQUIVALENTS	21.1	3.1
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	3.1	4.2
CASH AND CASH EQUIVALENTS, END OF PERIOD	24.2	7.3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for interest, net of interest expense capitalized	6.1	5.2
Cash paid during period for income taxes	6.4	14.1
Non-cash investing activities:
Liability for equipment acquired	$ 3.0	$ 10.0

XML

Background and Basis of Presentation

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Background

Neenah Paper, Inc. (“Neenah” or the “Company”), is a Delaware corporation incorporated in April 2004. The Company has two primary operations: its technical products business and its fine paper and packaging business. See Note 9, “Business Segment Information.”

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings Per Basic Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Continuing operations	$	1.11		$	0.97		$	3.63		$	3.36
Discontinued operations	—			—			—			(0.02		)
Basic earnings per share	$	1.11		$	0.97		$	3.63		$	3.34

Earnings Per Diluted Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Add: Assumed incremental shares under stock compensation plans (a)	163			317			240			294
Weighted-average diluted shares	16,974			17,088			17,034			17,068
Continuing operations	$	1.10		$	0.95		$	3.58		$	3.30
Discontinued operations	—			—			—			(0.02		)
Diluted earnings per share	$	1.10		$	0.95		$	3.58		$	3.28

(a) For the three months ended September 30, 2017, there were 144,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. For the three months ended September 30, 2016, there were no antidilutive options. For the nine months ended September 30, 2017 and 2016, there were 72,000 and 47,000 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock.

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The following table presents the carrying value and the fair value of the Company’s debt. 

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value (a)(b)		Carrying Value		Fair Value (a)(b)
2021 Senior Notes (5.25% fixed rate)	$	175.0	$	171.0	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	43.9		43.9		42.9		42.9
German loan agreement (2.45% fixed rate)	7.0		7.0		6.8		6.8
Total debt	$	225.9	$	221.9	$	224.7	$	219.2

(a) The fair value for all debt instruments was estimated from Level 2 measurements.

(b) The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities.

As of September 30, 2017, the Company had $3.6 million in marketable securities classified as “Other Assets” on the condensed consolidated balance sheet. The cost of such marketable securities was $3.4 million. Fair value for the Company’s marketable securities was estimated from Level 1 inputs. The Company’s marketable securities are designated for the payment of benefits under its supplemental employee retirement plan (“SERP”). As of September 30, 2017, Neenah Germany had investments of $1.7 million that were restricted to the payment of certain post-retirement employee benefits of which $0.6 million and $1.1 million are classified as “Prepaid and other current assets” and “Other Assets”, respectively, on the condensed consolidated balance sheet.

Income Taxes

Prior to June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them. As a result, the Company is no longer providing deferred income taxes on the 2017 unremitted earnings of our German operations and such taxes provided in the first quarter of 2017 of $2.3 million were reversed in the second quarter of 2017. In addition, the $4.1 million deferred income tax liability on unremitted German earnings for 2016 was eliminated in the second quarter of 2017.

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Accounting Standard Changes

9 Months Ended

Sep. 30, 2017

Accounting Changes and Error Corrections [Abstract]

Accounting Standard Changes

Accounting Standard Changes

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. The new standards also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. The Company plans to implement ASU 2016-09 as of January 1, 2019. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be implemented by the Company as of January 1, 2018. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendments in this ASU provide guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for the Company as of January 1, 2018, on a prospective basis. The Company early adopted ASU 2017-01 in the third quarter of 2017. There was no material impact on the consolidated financial statements as a result of the adoption.

As of September 30, 2017, no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows.

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Supplemental Balance Sheet Data

9 Months Ended

Sep. 30, 2017

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Data

Supplemental Balance Sheet Data

The following table presents inventories by major class:

	September 30, 2017			December 31, 2016
Raw materials	$	32.5		$	31.6
Work in progress	36.7			26.8
Finished goods	61.6			63.0
Supplies and other	3.6			3.1
	134.4			124.5
Adjust FIFO inventories to LIFO cost	(10.1		)	(8.2		)
Total	$	124.3		$	116.3

The FIFO values of inventories valued on the LIFO method were $117.9 million and $106.8 million as of September 30, 2017 and December 31, 2016, respectively. For the three and nine months ended September 30, 2017, income from continuing operations before income taxes was increased by less than $0.1 million due to a decrease in certain LIFO inventory quantities.

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the nine months ended September 30, 2017:

	Net unrealized foreign currency translation gain (loss)			Net gain (loss) from pension and other postretirement liabilities (a)			Unrealized gain (loss) on “available-for-sale” securities			Accumulated other comprehensive income (loss)
AOCI — December 31, 2016	$	(27.4	)	$	(64.5	)	$	(0.1	)	$	(92.0	)
Other comprehensive income (loss) before reclassifications	16.1			(1.0		)	0.1			15.2
Amounts reclassified from AOCI	—			4.6			—			4.6
Income from other comprehensive income items	16.1			3.6			0.1			19.8
Provision for income taxes	0.1			1.3			—			1.4
Other comprehensive income	16.0			2.3			0.1			18.4
AOCI — September 30, 2017	$	(11.4	)	$	(62.2	)	$	—		$	(73.6	)

(a) For the nine months ended September 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans. The Company also recorded a $0.2 million settlement loss in SERP for the three months ended September 30, 2017.

For the nine months ended September 30, 2017 and 2016, the Company reclassified $4.6 million and $5.5 million, respectively, of costs from accumulated other comprehensive income to cost of products sold and selling, general and administrative expenses on the condensed consolidated statements of operations. For the nine months ended September 30, 2017 and 2016, the Company recognized an income tax benefit of $1.7 million and $2.1 million, related to such reclassifications classified as "Provision for income taxes" on the condensed consolidated statements of operations.

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Debt

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt

Debt

Long-term debt consisted of the following:

	September 30, 2017			December 31, 2016
2021 Senior Notes (5.25% fixed rate) due May 2021	$	175.0		$	175.0
Global Revolving Credit Facilities (variable rates) due December 2019	43.9			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	7.0			6.8
Deferred financing costs	(3.0		)	(3.8		)
Total debt	222.9			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	221.6		$	219.7

2021 Senior Notes

In May 2013, the Company completed an underwritten offering of eight-year senior unsecured notes (the “2021 Senior Notes”) at a face amount of $175 million. The 2021 Senior Notes contain terms, covenants and events of default with which the Company must comply, which the Company believes are ordinary and standard for notes of this nature. As of September 30, 2017, the Company was in compliance with all terms of the indenture for the 2021 Senior Notes.

Amended and Restated Secured Revolving Credit Facility

In December 2014, the Company amended and restated its existing credit facility by entering into the Third Amended and Restated Credit Agreement (the “Third Amended Credit Agreement”). 

The Third Amended Credit Agreement contains covenants with which the Company and its subsidiaries must comply during the term of the agreement, which the Company believes are ordinary and standard for agreements of this nature. As of September 30, 2017, the Company was in compliance with all terms of the Third Amended Credit Agreement.

On August 30, 2017, the Company amended the Third Amended Credit Agreement, among other things, to make certain definitional and administrative changes to address definition of EBITDA, Inter-Company Loans and Permitted Offshore Acquisitions, as further defined in the Third Amended Credit Agreement, in order to enable the Company to more efficiently operate and grow in international markets.

Availability under the Global Revolving Credit Facilities varies over time depending on the value of the Company’s inventory, receivables and various capital assets. As of September 30, 2017, the Company had $43.9 million of borrowings and $0.9 million in letters of credit outstanding under the Global Revolving Credit Facilities and $125.9 million of available credit (based on exchange rates at September 30, 2017). As of September 30, 2017, the weighted-average interest rate on outstanding Global Revolving Credit Facility borrowings was 3.2 percent per annum. As of December 31, 2016, the weighted-average interest rate under the Global Revolving Credit Facilities was 2.8 percent per annum.

Under the terms of the 2021 Senior Notes and the Third Amended Credit Agreement, the Company has limitations on its ability to repurchase shares of and pay dividends on its Common Stock. These limitations are triggered depending on the Company’s credit availability under the Third Amended Credit Agreement and leverage levels under the Senior Notes. As of September 30, 2017, none of these covenants were restrictive to the Company’s ability to repurchase shares of and pay dividends on its Common Stock.

For additional information about our debt agreements, see Note 7 of the Notes to Consolidated Financial Statements in our 2016 Form 10-K.

Borrowings and Repayments of Long-Term Debt

The condensed consolidated statements of cash flows present borrowings and repayments under the Global Revolving Credit Facilities using a gross approach. This approach presents not only discrete borrowings for transactions such as a business acquisition, but also reflects all borrowings and repayments that occur as part of daily management of cash receipts and disbursements. For the nine months ended September 30, 2017, the Company made scheduled debt repayments of $0.6 million, $8.0 million of borrowings for an asset acquisition, and the remaining amounts of borrowings and repayments related to daily cash management activities. For the nine months ended September 30, 2016, the Company made scheduled debt repayments of $0.9 million and net long-term debt repayments of $19.5 million related to daily cash management activities.

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Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

Pension Plans

Substantially all active employees of the Company’s U.S. operations participate in defined benefit pension plans and/or defined contribution retirement plans. The Company has defined benefit plans for substantially all its employees in Germany and the United Kingdom. In addition, the Company maintains a SERP which is a non-qualified defined benefit plan and a supplemental retirement contribution plan (the “SRCP”) which is a non-qualified, unfunded defined contribution plan. The Company provides benefits under the SERP and SRCP to the extent necessary to fulfill the intent of its retirement plans without regard to the limitations set by the Internal Revenue Code on qualified and non-qualified retirement benefit plans.

The following table presents the components of net periodic benefit cost for the Company’s defined benefit plans and postretirement plans other than pensions:

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended September 30,
	2017			2016			2017		2016
Service cost	$	1.3		$	1.2		$	0.3	$	0.3
Interest cost	3.6			4.0			0.3		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.4			1.6			—		0.1
Amortization of prior service benefit	0.1			0.1			—		(0.1		)
Net periodic benefit cost	$	1.4		$	2.2		$	0.6	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Nine Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	4.0		$	3.6		$	0.9		$	0.9
Interest cost	11.0			12.0			1.1			1.2
Expected return on plan assets (a)	(14.8		)	(14.2		)	—			—
Recognized net actuarial loss	4.5			4.9			0.1			0.2
Amortization of prior service benefit	0.2			0.2			(0.1		)	(0.2		)
Net periodic benefit cost	$	4.9		$	6.5		$	2.0		$	2.1

(a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return.

The Company expects to make aggregate contributions to qualified and nonqualified defined benefit pension trusts and to pay pension benefits for unfunded pension and other postretirement benefit plans of approximately $16 million in calendar 2017.  For the nine months ended September 30, 2017, the Company made $9.0 million of such payments. The Company made similar payments of $5.6 million and $18.4 million for the nine months ended September 30, 2016 and for the year ended December 31, 2016, respectively.

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Stock Compensation Plan

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation Plan

Stock Compensation Plan

Stock Options and Stock Appreciation Rights (“Options”)

The following table presents information regarding Options awarded during the nine months ended September 30, 2017:

Options granted	144,089
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54

The weighted-average grant date fair value for Options granted during the nine months ended September 30, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions:

Expected term in years	5.8
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

The following table presents information regarding Options that vested during the nine months ended September 30, 2017:

Options vested	113,581
Aggregate grant date fair value of Options vested (in millions)	$	1.6

The following table presents information regarding outstanding Options:

	September 30, 2017		December 31, 2016
Options outstanding	502,595		530,462
Aggregate intrinsic value (in millions)	$	15.7	$	25.0
Per share weighted average exercise price	$	54.36	$	38.35
Exercisable Options	279,581		336,336
Aggregate intrinsic value (in millions)	$	12.6	$	19.3
Unvested Options	223,014		194,126
Per share weighted average grant date fair value	$	14.65	$	15.15

Performance Share Units (“PSUs”) and Restricted Share Units (“RSUs”)

For the nine months ended September 30, 2017, the Company granted target awards of 41,883 PSUs. The measurement period for three fourths of the PSUs is January 1, 2017 through December 31, 2017, and for the remaining fourth of the PSUs is January 1, 2017 through December 31, 2019. The PSUs vest on December 31, 2019. Common Stock equal to not less than 40 percent and not more than 200 percent of the PSUs target will be awarded based on the Company’s return on invested capital, consolidated revenue growth, EPS and total return to shareholders relative to the companies in the Russell 2000® Value small cap index. The Company’s return on invested capital, consolidated revenue growth and EPS are adjusted for certain items as further described in the Performance Share Award Agreement. The market price on the date of grant for the PSUs was $82.12 per share.

For the nine months ended September 30, 2017, the Company awarded 9,226 RSUs to non-employee members of the Board of Directors. The weighted average grant date fair value of such awards was $75.85 per share and the awards vest one year from the date of grant. During the vesting period, the holders of the RSUs are entitled to dividends, but the RSUs do not have voting rights and are forfeited in the event the holder is no longer a member of the Board of Directors on the vesting date.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

As of September 30, 2017 and December 31, 2016, the Company had 16,818,005 shares and 16,771,000 shares of Common Stock outstanding, respectively.

In May 2017, the Company’s Board of Directors authorized a program that would allow the Company to repurchase up to $25 million of its outstanding Common Stock over the next 12 months (the “2017 Stock Purchase Plan”). The Company also had $25 million repurchase programs in place during the preceding two years that expired in May 2017 (the “2016 Stock Purchase Plan”) and May 2016 (the “2015 Stock Purchase Plan”), respectively. The following table shows shares purchased under the respective stock purchase plans:

	Nine Months Ended September 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		33,800	2.6
2015 Stock Purchase Plan	—	—		93,600	5.2

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Contingencies and Legal Matters

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Legal Matters

Contingencies and Legal Matters

Litigation

The Company is involved in certain legal actions and claims arising in the ordinary course of business. While the outcome of these legal actions and claims cannot be predicted with certainty, it is the opinion of management that the outcome of any such claim which is pending or threatened, either individually or on a combined basis, will not have a material effect on the consolidated financial condition, results of operations or cash flows of the Company.

Income Taxes

The Company periodically undergoes examination by the Internal Revenue Service (the “IRS”) as well as various state and foreign jurisdictions. These tax authorities routinely challenge certain deductions and credits reported by the Company on its income tax returns. No significant tax audit findings are being contested at this time with either the IRS or any state or foreign tax authority.

Employees and Labor Relations

The Company’s U.S. union employees are represented by the United Steelworkers Union (the “USW”).  Approximately 50 percent of salaried employees and 80 percent of hourly employees of Neenah Germany are eligible to be represented by the Mining, Chemicals and Energy Trade Union, Industriegewerkschaft Bergbau, Chemie and Energie (the “IG BCE”). As of September 30, 2017, the Company had approximately 653 U.S. employees covered under collective bargaining agreements that will expire in the next 12 months. The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	199
June 2018	Neenah, WI (b)	USW	251
July 2018	Munising, MI (b)	USW	203
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	96
August 2021	Brattleboro, VT	USW	90
November 2021	Lowville, NY	USW	111

(a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

The Company’s United Kingdom salaried and hourly employees are eligible to participate in Unite the Union (“UNITE”) on an individual basis, but not under a collective bargaining agreement.

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Business Segment Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company’s reportable operating segments consist of Technical Products, Fine Paper and Packaging and Other.

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

• The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers, primarily in North America.

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	125.9	$	114.1	$	375.1	$	362.1
Fine Paper and Packaging	113.3		112.9		343.3		340.4
Other	5.9		5.9		17.5		18.5
Consolidated	$	245.1	$	232.9	$	735.9	$	721.0

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	15.6		$	14.1		$	44.1		$	53.4
Fine Paper and Packaging	17.8			17.3			55.6			53.2
Other	0.2			0.1			0.1			0.1
Unallocated corporate costs	(4.6		)	(4.6		)	(14.6		)	(14.5		)
Consolidated	$	29.0		$	26.9		$	85.2		$	92.2

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Subsequent Event

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On November 1, 2017, the Company purchased all of the outstanding equity of W.A. Sanders Coldenhove Holding B.V. ("Coldenhove") for approximately $45 million. The payment was funded with $14 million of cash on hand and borrowings of $31 million from the Global Revolving Credit Facilities. Coldenhove is a specialty materials manufacturer based in the Netherlands, with a leading position in digital transfer media and other technical products. The Company assumed all rights, obligations and liabilities of Coldenhove, subject to certain representations, warranties, terms, conditions and indemnities typical in this type of transaction. The Company will account for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. The Company has not included the unaudited pro forma information in this filing, as the Company has not yet finalized the acquisition accounting.

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Background and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Consolidation and Presentation

Basis of Consolidation and Presentation

These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in accordance with those rules and regulations, do not include all information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management believes that the disclosures made are adequate for a fair presentation of the Company’s results of operations, financial position and cash flows. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of operations, financial position and cash flows for the interim periods presented herein. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make extensive use of estimates and assumptions that affect the reported amounts and disclosures. Actual results may vary from these estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

The condensed consolidated financial statements of Neenah and its subsidiaries included herein are unaudited. The condensed consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries. Intercompany balances and transactions have been eliminated.

Earnings per Share (“EPS”)

Earnings per Share (“EPS”)

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings Per Basic Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Continuing operations	$	1.11		$	0.97		$	3.63		$	3.36
Discontinued operations	—			—			—			(0.02		)
Basic earnings per share	$	1.11		$	0.97		$	3.63		$	3.34

Earnings Per Diluted Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Add: Assumed incremental shares under stock compensation plans (a)	163			317			240			294
Weighted-average diluted shares	16,974			17,088			17,034			17,068
Continuing operations	$	1.10		$	0.95		$	3.58		$	3.30
Discontinued operations	—			—			—			(0.02		)
Diluted earnings per share	$	1.10		$	0.95		$	3.58		$	3.28

(a) For the three months ended September 30, 2017, there were 144,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. For the three months ended September 30, 2016, there were no antidilutive options. For the nine months ended September 30, 2017 and 2016, there were 72,000 and 47,000 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”) which establishes a framework for measuring fair value. ASC Topic 820 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Income Taxes

Income Taxes

Prior to June 30, 2017, the Company had not asserted under ASC 740, Income Taxes, that unremitted earnings of our German operations were indefinitely reinvested. Therefore, deferred U.S. income taxes were accrued on those earnings which we planned to repatriate in the future. In June 2017, as part of our annual strategic plan review, the Company reassessed its intentions regarding the indefinite reinvestment of undistributed earnings of our German operations and asserted its intent to indefinitely reinvest them.

Accounting Standard Changes

Accounting Standard Changes

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance specifies how and when an entity will recognize revenue arising from contracts with customers and requires entities to disclose information about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The Company has substantially completed its assessment of the new standards and does not believe there will be a material impact from adoption on its consolidated financial statements. The Company will adopt the new standards using the modified retrospective method as of January 1, 2018. The new standards also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current lease accounting. The guidance also eliminates current real estate-specific provisions for all entities. The Company plans to implement ASU 2016-09 as of January 1, 2019. The Company is currently assessing the impact of the adoption of ASU 2016-02 on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). ASU 2017-07 requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only the service-cost component of net benefit cost is eligible for capitalization. This ASU will be implemented by the Company as of January 1, 2018. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendments in this ASU provide guidance in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments are effective for the Company as of January 1, 2018, on a prospective basis. The Company early adopted ASU 2017-01 in the third quarter of 2017. There was no material impact on the consolidated financial statements as a result of the adoption.

As of September 30, 2017, no other amendments to the ASC have been issued that will have or are reasonably likely to have a material effect on the Company’s financial position, results of operations or cash flows.

Business Segment Information

The Company’s reportable operating segments consist of Technical Products, Fine Paper and Packaging and Other.

• The Technical Products segment is an aggregation of the Company’s filtration and performance materials businesses which are similar in terms of economic characteristics, nature of products, processes, customer class and product distribution methods and is an international producer of fiber-formed, coated and/or saturated specialized media that delivers high performance benefits to customers. Included in this segment are filtration media, tape and abrasives backings products, and durable label and specialty substrate products.

• The Fine Paper and Packaging segment is a leading supplier of premium printing and other high-end specialty papers, premium packaging and specialty office papers, primarily in North America.

• The Other segment is composed of papers sold to converters for end uses such as covering materials for datebooks, diaries, yearbooks and traditional photo albums. These product lines represent an operating segment which does not meet the quantitative threshold for a reportable segment, however, due to the dissimilar nature of these products, they are not managed as part of either the Fine Paper and Packaging or Technical Products segments.

Each segment employs different technologies and marketing strategies. Disclosure of segment information is on the same basis that management uses internally for evaluating segment performance and allocating resources. Transactions between segments are eliminated in consolidation. The costs of shared services, and other administrative functions managed on a common basis, are allocated to the segments based on usage, where possible, or other factors based on the nature of the activity. General corporate expenses that do not directly support the operations of the business segments are shown as Unallocated corporate costs.

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Background and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of computation of basic and diluted EPS

The following table presents the computation of basic and diluted EPS (dollars in millions except per share amounts, shares in thousands):

Earnings Per Basic Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Continuing operations	$	1.11		$	0.97		$	3.63		$	3.36
Discontinued operations	—			—			—			(0.02		)
Basic earnings per share	$	1.11		$	0.97		$	3.63		$	3.34

Earnings Per Diluted Common Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Income from continuing operations	$	18.8		$	16.4		$	61.4		$	57.0
Amounts attributable to participating securities	(0.2		)	(0.2		)	(0.5		)	(0.6		)
Income from continuing operations available to common stockholders	18.6			16.2			60.9			56.4
Loss from discontinued operations, net of income taxes	—			—			—			(0.4		)
Net income available to common stockholders	$	18.6		$	16.2		$	60.9		$	56.0
Weighted-average basic shares outstanding	16,811			16,771			16,794			16,774
Add: Assumed incremental shares under stock compensation plans (a)	163			317			240			294
Weighted-average diluted shares	16,974			17,088			17,034			17,068
Continuing operations	$	1.10		$	0.95		$	3.58		$	3.30
Discontinued operations	—			—			—			(0.02		)
Diluted earnings per share	$	1.10		$	0.95		$	3.58		$	3.28

(a) For the three months ended September 30, 2017, there were 144,000 potentially dilutive options excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock. For the three months ended September 30, 2016, there were no antidilutive options. For the nine months ended September 30, 2017 and 2016, there were 72,000 and 47,000 potentially dilutive options, respectively, excluded from the computation of dilutive common shares because the exercise price of such options exceeded the average market price of the Company’s common stock.

Schedule of the carrying value and fair value of the Company's debt

The following table presents the carrying value and the fair value of the Company’s debt. 

	September 30, 2017				December 31, 2016
	Carrying Value		Fair Value (a)(b)		Carrying Value		Fair Value (a)(b)
2021 Senior Notes (5.25% fixed rate)	$	175.0	$	171.0	$	175.0	$	169.5
Global Revolving Credit Facilities (variable rates)	43.9		43.9		42.9		42.9
German loan agreement (2.45% fixed rate)	7.0		7.0		6.8		6.8
Total debt	$	225.9	$	221.9	$	224.7	$	219.2

(a) The fair value for all debt instruments was estimated from Level 2 measurements.

(b) The fair value of short and long-term debt is estimated using rates currently available to the Company for debt of the same remaining maturities.

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Supplemental Balance Sheet Data (Tables)

9 Months Ended

Sep. 30, 2017

Balance Sheet Related Disclosures [Abstract]

Schedule of inventories by major class

The following table presents inventories by major class:

	September 30, 2017			December 31, 2016
Raw materials	$	32.5		$	31.6
Work in progress	36.7			26.8
Finished goods	61.6			63.0
Supplies and other	3.6			3.1
	134.4			124.5
Adjust FIFO inventories to LIFO cost	(10.1		)	(8.2		)
Total	$	124.3		$	116.3

Schedule of changes in accumulated other comprehensive income

The following table presents changes in accumulated other comprehensive income (loss) (“AOCI”) for the nine months ended September 30, 2017:

	Net unrealized foreign currency translation gain (loss)			Net gain (loss) from pension and other postretirement liabilities (a)			Unrealized gain (loss) on “available-for-sale” securities			Accumulated other comprehensive income (loss)
AOCI — December 31, 2016	$	(27.4	)	$	(64.5	)	$	(0.1	)	$	(92.0	)
Other comprehensive income (loss) before reclassifications	16.1			(1.0		)	0.1			15.2
Amounts reclassified from AOCI	—			4.6			—			4.6
Income from other comprehensive income items	16.1			3.6			0.1			19.8
Provision for income taxes	0.1			1.3			—			1.4
Other comprehensive income	16.0			2.3			0.1			18.4
AOCI — September 30, 2017	$	(11.4	)	$	(62.2	)	$	—		$	(73.6	)

(a) For the nine months ended September 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans. The Company also recorded a $0.2 million settlement loss in SERP for the three months ended September 30, 2017.

^[1]

[1] (a) For the nine months ended September 30, 2017, the Company recorded a $1.2 million increase in the employee benefit obligation related to a pension remeasurement resulting from the redistribution of active and inactive participants into separate pension plans. The Company also recorded a $0.2 million settlement loss in SERP for the three months ended September 30, 2017.

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Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt consisted of the following:

	September 30, 2017			December 31, 2016
2021 Senior Notes (5.25% fixed rate) due May 2021	$	175.0		$	175.0
Global Revolving Credit Facilities (variable rates) due December 2019	43.9			42.9
German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022	7.0			6.8
Deferred financing costs	(3.0		)	(3.8		)
Total debt	222.9			220.9
Less: Debt payable within one year	1.3			1.2
Long-term debt	$	221.6		$	219.7

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Pension and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Schedule of components of net periodic benefit cost for defined benefit plans and postretirement plans other than pensions

Components of Net Periodic Benefit Cost for Defined Benefit Plans

	Pension Benefits						Postretirement Benefits Other than Pensions
	Three Months Ended September 30,
	2017			2016			2017		2016
Service cost	$	1.3		$	1.2		$	0.3	$	0.3
Interest cost	3.6			4.0			0.3		0.4
Expected return on plan assets (a)	(5.0		)	(4.7		)	—		—
Recognized net actuarial loss	1.4			1.6			—		0.1
Amortization of prior service benefit	0.1			0.1			—		(0.1		)
Net periodic benefit cost	$	1.4		$	2.2		$	0.6	$	0.7

	Pension Benefits						Postretirement Benefits Other than Pensions
	Nine Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	4.0		$	3.6		$	0.9		$	0.9
Interest cost	11.0			12.0			1.1			1.2
Expected return on plan assets (a)	(14.8		)	(14.2		)	—			—
Recognized net actuarial loss	4.5			4.9			0.1			0.2
Amortization of prior service benefit	0.2			0.2			(0.1		)	(0.2		)
Net periodic benefit cost	$	4.9		$	6.5		$	2.0		$	2.1

(a) The expected return on plan assets is determined by multiplying the fair value of plan assets at the prior year-end (adjusted for estimated current year cash benefit payments and contributions) by the expected long-term rate of return.

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Stock Compensation Plan (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock options awarded

The following table presents information regarding Options awarded during the nine months ended September 30, 2017:

Options granted	144,089
Per share weighted average exercise price	$	82.11
Per share weighted average grant date fair value	$	13.54

Schedule of assumptions used to determine the grant date fair value of options granted

The weighted-average grant date fair value for Options granted during the nine months ended September 30, 2017 was estimated using the Black-Scholes option valuation model with the following assumptions:

Expected term in years	5.8
Risk free interest rate	2.1	%
Volatility	22.9	%
Dividend yield	3.0	%

Schedule of stock options vested during the period

The following table presents information regarding Options that vested during the nine months ended September 30, 2017:

Options vested	113,581
Aggregate grant date fair value of Options vested (in millions)	$	1.6

Schedule of outstanding stock options

The following table presents information regarding outstanding Options:

	September 30, 2017		December 31, 2016
Options outstanding	502,595		530,462
Aggregate intrinsic value (in millions)	$	15.7	$	25.0
Per share weighted average exercise price	$	54.36	$	38.35
Exercisable Options	279,581		336,336
Aggregate intrinsic value (in millions)	$	12.6	$	19.3
Unvested Options	223,014		194,126
Per share weighted average grant date fair value	$	14.65	$	15.15

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

Schedule of shares purchased under the respective stock purchase plans

The following table shows shares purchased under the respective stock purchase plans:

	Nine Months Ended September 30,
	2017			2016
	Shares	$		Shares	$
2017 Stock Purchase Plan	—	$	—	—	$	—
2016 Stock Purchase Plan	85,354	6.8		33,800	2.6
2015 Stock Purchase Plan	—	—		93,600	5.2

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Contingencies and Legal Matters (Tables)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of bargaining agreements

The following table shows the expiration dates of the Company’s various bargaining agreements and the number of employees covered under each of these agreements.

Contract Expiration Date	Location	Union	Number of Employees
January 2018	Whiting, WI (b)	USW	199
June 2018	Neenah, WI (b)	USW	251
July 2018	Munising, MI (b)	USW	203
February 2019	Neenah Germany	IG BCE	(a)
May 2019	Appleton, WI (b)	USW	96
August 2021	Brattleboro, VT	USW	90
November 2021	Lowville, NY	USW	111

(a) Under German law union membership is voluntary and does not need to be disclosed to the Company. As a result, the number of employees covered by the collective bargaining agreement with the IG BCE cannot be determined.

(b) The Whiting, Neenah, Munising and Appleton mills have bargained jointly with the USW on pension matters. The current agreements will remain in effect until September 2019.

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Schedule of net sales and operating income for each of the Company's business segment

The following table summarizes the net sales and operating income for each of the Company’s business segments.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales
Technical Products	$	125.9	$	114.1	$	375.1	$	362.1
Fine Paper and Packaging	113.3		112.9		343.3		340.4
Other	5.9		5.9		17.5		18.5
Consolidated	$	245.1	$	232.9	$	735.9	$	721.0

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating income (loss)
Technical Products	$	15.6		$	14.1		$	44.1		$	53.4
Fine Paper and Packaging	17.8			17.3			55.6			53.2
Other	0.2			0.1			0.1			0.1
Unallocated corporate costs	(4.6		)	(4.6		)	(14.6		)	(14.5		)
Consolidated	$	29.0		$	26.9		$	85.2		$	92.2

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Background and Basis of Presentation - EPS (Details) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) segment $ / shares shares	Sep. 30, 2016 USD ($) $ / shares shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of primary operations | segment			2
Earnings (Loss) Per Basic Common Share
Income from continuing operations	$ 18.8	$ 16.4	$ 61.4	$ 57.0
Amounts attributable to participating securities	(0.2)	(0.2)	(0.5)	(0.6)
Income from continuing operations available to common stockholders	18.6	16.2	60.9	56.4
Loss from discontinued operations, net of income taxes	0.0	0.0	0.0	(0.4)
Net income available to common stockholders	$ 18.6	$ 16.2	$ 60.9	$ 56.0
Weighted-average basic shares outstanding (in shares) | shares	16,811,000	16,771,000	16,794,000	16,774,000
Basic earnings (loss) per share
Continuing operations (in dollars per share) | $ / shares	$ 1.11	$ 0.97	$ 3.63	$ 3.36
Discontinued operations (in dollars per share) | $ / shares	0.00	0.00	0.00	(0.02)
Basic earnings per share (in dollars per share) | $ / shares	$ 1.11	$ 0.97	$ 3.63	$ 3.34
Earnings (Loss) Per Diluted Common Share
Income from continuing operations	$ 18.8	$ 16.4	$ 61.4	$ 57.0
Amounts attributable to participating securities	(0.2)	(0.2)	(0.5)	(0.6)
Income from continuing operations available to common stockholders	18.6	16.2	60.9	56.4
Loss from discontinued operations, net of income taxes	0.0	0.0	0.0	(0.4)
Net income available to common stockholders	$ 18.6	$ 16.2	$ 60.9	$ 56.0
Weighted-average basic shares outstanding (in shares) | shares	16,811,000	16,771,000	16,794,000	16,774,000
Add: Assumed incremental shares under stock compensation plans (in shares) | shares	163,000	317,000	240,000	294,000
Weighted-average diluted shares (in shares) | shares	16,974,000	17,088,000	17,034,000	17,068,000
Diluted earnings (loss) per share
Continuing operations (in dollars per share) | $ / shares	$ 1.10	$ 0.95	$ 3.58	$ 3.30
Discontinued operations (in dollars per share) | $ / shares	0.00	0.00	0.00	(0.02)
Diluted (in dollars per share) | $ / shares	$ 1.10	$ 0.95	$ 3.58	$ 3.28
Potentially dilutive stock-based compensation awards excluded from computation of dilutive common shares (in shares) | shares	144,000	0	72,000	47,000

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Background and Basis of Presentation - Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Fixed rate of interest (as a percent)	5.25%
Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Fixed rate of interest (as a percent)	2.45%
Carrying Value
Fair Value of Financial Instruments
Total debt	$ 225.9	$ 224.7
Carrying Value | Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Total debt	175.0	175.0
Carrying Value | Secured debt | Global Revolving Credit Facilities (variable rates)
Fair Value of Financial Instruments
Total debt	43.9	42.9
Carrying Value | Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Total debt	7.0	6.8
Level 2 | Fair Value
Fair Value of Financial Instruments
Total debt	221.9	219.2
Level 2 | Fair Value | Senior notes | 2021 Senior Notes (5.25% fixed rate)
Fair Value of Financial Instruments
Total debt	171.0	169.5
Level 2 | Fair Value | Secured debt | Global Revolving Credit Facilities (variable rates)
Fair Value of Financial Instruments
Total debt	43.9	42.9
Level 2 | Fair Value | Secured debt | German loan agreement (2.45% fixed rate)
Fair Value of Financial Instruments
Total debt	$ 7.0	$ 6.8

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Background and Basis of Presentation - Marketable Securities (Details) $ in Millions	Sep. 30, 2017 USD ($)
Marketable securities
Cost of marketable securities	$ 3.4
Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	1.7
Other Assets | Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	1.1
Prepaid Expenses and Other Current Assets | Pension Benefits
Held to maturity
Investments restricted to the payment of post-retirement employee benefits	0.6
Fair Value | Level 1 | Other Assets
Marketable securities
Fair value of marketable securities	$ 3.6

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Background and Basis of Presentation - Income Tax (Details) $ in Millions	3 Months Ended
	Jun. 30, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Increase (decrease) in deferred income taxes	$ 2.3
Deferred tax liabilities eliminated, undistributed foreign earnings	$ 4.1

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Supplemental Balance Sheet Data - Inventories (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Dec. 31, 2016
Inventories by major class:
Raw materials	$ 32.5	$ 32.5	$ 31.6
Work in progress	36.7	36.7	26.8
Finished goods	61.6	61.6	63.0
Supplies and other	3.6	3.6	3.1
Inventories, gross	134.4	134.4	124.5
Adjust FIFO inventories to LIFO cost	(10.1)	(10.1)	(8.2)
Total	124.3	124.3	116.3
FIFO values of inventories valued on the LIFO method	117.9	117.9	$ 106.8
Maximum
Inventories by major class:
Decrease in LIFO inventory (less than)	$ 0.1	$ 0.1

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Supplemental Balance Sheet Data - AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			$ 338.3
Amounts reclassified from AOCI			4.6	$ 5.5
Income from other comprehensive income items	$ 6.6	$ 2.6	19.8	6.5
Provision for income taxes	0.5	0.7	1.4	2.1
Other comprehensive income	6.1	1.9	18.4	4.4
AOCI, Balance at the end of the period	396.9		396.9
Income tax benefit	(7.0)	$ (7.8)	(14.4)	(26.9)
Accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Income tax benefit			1.7	$ 2.1
Net unrealized foreign currency translation gain (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(27.4)
Other comprehensive income (loss) before reclassifications			16.1
Amounts reclassified from AOCI			0.0
Income from other comprehensive income items			16.1
Provision for income taxes			0.1
Other comprehensive income			16.0
AOCI, Balance at the end of the period	(11.4)		(11.4)
Net gain (loss) from pension and other postretirement liabilities (a)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(64.5)
Other comprehensive income (loss) before reclassifications			(1.0)
Amounts reclassified from AOCI			4.6
Income from other comprehensive income items			3.6
Provision for income taxes			1.3
Other comprehensive income			2.3
AOCI, Balance at the end of the period	(62.2)		(62.2)
Increase (decrease) in employee benefit obligation			1.2
Net gain (loss) from pension and other postretirement liabilities (a) | Supplemental Employee Retirement Plan
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Gain (loss) due to settlement	(0.2)
Unrealized gain (loss) on “available-for-sale” securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(0.1)
Other comprehensive income (loss) before reclassifications			0.1
Amounts reclassified from AOCI			0.0
Income from other comprehensive income items			0.1
Provision for income taxes			0.0
Other comprehensive income			0.1
AOCI, Balance at the end of the period	0.0		0.0
Accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
AOCI, Balance at the beginning of the period			(92.0)
Other comprehensive income (loss) before reclassifications			15.2
Amounts reclassified from AOCI			4.6
Income from other comprehensive income items			19.8
Provision for income taxes			1.4
Other comprehensive income			18.4
AOCI, Balance at the end of the period	$ (73.6)		$ (73.6)

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Debt (Details)	1 Months Ended	9 Months Ended
	May 31, 2013 USD ($)	Sep. 30, 2017 USD ($) installment	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Principal Payments
Total debt		$ 222,900,000		$ 220,900,000
Deferred financing costs		(3,000,000)		(3,800,000)
Less: Debt payable within one year		1,300,000		1,200,000
Long-term debt		221,600,000		$ 219,700,000
Scheduled debt repayment		600,000	$ 900,000
Long-term debt borrowings		8,000,000	$ 19,500,000
Global Revolving Credit Facilities (variable rates) due December 2019
Principal Payments
Letters of credit outstanding		900,000
Available credit		$ 125,900,000
Weighted-average interest rate (as a percent)		3.20%		2.80%
Senior notes | 2021 Senior Notes (5.25% fixed rate) due May 2021
Principal Payments
Total debt		$ 175,000,000		$ 175,000,000
Debt instrument, interest rate, stated percentage		5.25%
Total term of notes	8 years
Face amount	$ 175,000,000
Line of credit | Global Revolving Credit Facilities (variable rates) due December 2019
Principal Payments
Total debt		$ 43,900,000		42,900,000
Secured debt | German loan agreement (2.45% fixed rate) due in 32 equal quarterly installments ending September 2022
Principal Payments
Total debt		$ 7,000,000		$ 6,800,000
Debt instrument, interest rate, stated percentage		2.45%
Debt instrument, due number of equal quarterly installments | installment		32

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Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Pension and other postretirement benefits
Aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans			$ 9.0	$ 5.6	$ 18.4
Pension Benefits
Pension and other postretirement benefits
Service cost	$ 1.3	$ 1.2	4.0	3.6
Interest cost	3.6	4.0	11.0	12.0
Expected return on plan assets	(5.0)	(4.7)	(14.8)	(14.2)
Recognized net actuarial loss	1.4	1.6	4.5	4.9
Amortization of prior service benefit	0.1	0.1	0.2	0.2
Net periodic benefit cost	1.4	2.2	4.9	6.5
Expected 2017 aggregate contributions to qualified and non-qualified pension trusts and payments of pension benefits for unfunded pension plans	16.0		16.0
Postretirement Benefits Other than Pensions
Pension and other postretirement benefits
Service cost	0.3	0.3	0.9	0.9
Interest cost	0.3	0.4	1.1	1.2
Expected return on plan assets	0.0	0.0	0.0	0.0
Recognized net actuarial loss	0.0	0.1	0.1	0.2
Amortization of prior service benefit	0.0	(0.1)	(0.1)	(0.2)
Net periodic benefit cost	$ 0.6	$ 0.7	$ 2.0	$ 2.1

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Stock Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Options
Stock options awarded
Options granted (in shares)	144,089
Per share weighted average exercise price (in dollars per share)	$ 82.11
Per share weighted average grant date fair value (in dollars per share)	$ 13.54
Fair value assumptions
Expected term in years	5 years 9 months 16 days
Risk free interest rate (as a percent)	2.10%
Volatility (as a percent)	22.90%
Dividend yield (as a percent)	3.00%
Stock options and Stock Appreciation Rights vested
Options vested (in shares)	113,581
Aggregate grant date fair value of Options vested	$ 1.6
Outstanding Stock Options and Stock Appreciation Rights
Options outstanding (in shares)	502,595	530,462
Aggregate intrinsic value (in dollars)	$ 15.7	$ 25.0
Per share weighted average exercise price (in dollars per share)	$ 54.36	$ 38.35
Exercisable Options (in shares)	279,581	336,336
Aggregate intrinsic value (in dollars)	$ 12.6	$ 19.3
Unvested Options (in shares)	223,014	194,126
Per share weighted average grant date fair value (in dollars per share)	$ 14.65	$ 15.15
Performance Share Units ("PSUs")
Additional disclosures
Granted (in shares)	41,883
Percentage of target to be awarded, low end of range (not less than)	40.00%
Percentage of target to be awarded, high end of range (not more than)	200.00%
Market price at grant date of performance units (in dollars per share)	$ 82.12
Restricted Stock Units (RSUs)
Additional disclosures
Granted (in shares)	9,226
Equity instruments other than options, weighted average grant date fair value (USD per share)	$ 75.85
Equity instruments other than options, vesting period	1 year

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Stockholders' Equity (Details) - USD ($)	1 Months Ended	9 Months Ended
	May 31, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	May 31, 2016	May 31, 2015
Stockholders' equity
Common stock, outstanding shares (in shares)		16,818,005		16,771,000
2017 Stock Purchase Plan
Stockholders' equity
Period over which repurchases allowed under the plan	12 months
Common stock purchased under the stock purchase plan (in shares)		0	0
Cost of shares of common stock acquired		$ 0	$ 0
2017 Stock Purchase Plan | Maximum
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)	$ 25,000,000
2016 Stock Purchase Plan
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)					$ 25,000,000
Common stock purchased under the stock purchase plan (in shares)		85,354	33,800
Cost of shares of common stock acquired		$ 6,800,000	$ 2,600,000
2015 Stock Purchase Plan
Stockholders' equity
Common stock purchased under the stock purchase plan (in shares)		0	93,600
Cost of shares of common stock acquired		$ 0	$ 5,200,000
2015 Stock Purchase Plan | Maximum
Stockholders' equity
Authorized amount of repurchase under the stock purchase plan (up to)						$ 25,000,000

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Contingencies and Legal Matters (Details)	9 Months Ended
	Sep. 30, 2017 employee
Workforce Subject to Collective Bargaining Arrangements Expiring within One Year
Concentrations
Number of Employees	653
IG BCE | Germany | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Percentage of salaried employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE)	50.00%
Percentage of hourly employees eligible to be represented by Mining, Chemicals and Energy Trade Union (IG BCE)	80.00%
USW | Whiting, WI | January 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	199
USW | Neenah, WI | June 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	251
USW | Munising, MI | July 2018 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	203
USW | Appleton, WI | May 2019 | Workforce Subject to Collective Bargaining Arrangements
Concentrations
Number of Employees	96
USW | Brattleboro, VT | August 2021
Concentrations
Number of Employees	90
USW | Lowville, NY | November 2021
Concentrations
Number of Employees	111

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Business Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Business segment
Net sales	$ 245.1	$ 232.9	$ 735.9	$ 721.0
Operating income (loss)	29.0	26.9	85.2	92.2
Unallocated corporate costs
Business segment
Operating income (loss)	(4.6)	(4.6)	(14.6)	(14.5)
Technical Products | Operating segments
Business segment
Net sales	125.9	114.1	375.1	362.1
Operating income (loss)	15.6	14.1	44.1	53.4
Fine Paper and Packaging | Operating segments
Business segment
Net sales	113.3	112.9	343.3	340.4
Operating income (loss)	17.8	17.3	55.6	53.2
Other | Operating segments
Business segment
Net sales	5.9	5.9	17.5	18.5
Operating income (loss)	$ 0.2	$ 0.1	$ 0.1	$ 0.1

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Subsequent Event (Details) - Subsequent Event $ in Millions	Nov. 01, 2017 USD ($)
Coldenhove
Subsequent Event [Line Items]
Business combination, consideration transferred	$ 45
Cash on hand to fund business acquisition	14
Global Revolving Credit Facilities (variable rates)
Subsequent Event [Line Items]
Proceeds from line of credit	$ 31